Supplementary Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
General outline and financial impact
Taxation Laws Amendment (Structured Settlements) Bill 2002 inserts Division 54 into the Income Tax Assessment Act 1997 (ITAA 1997) which provides a tax exemption for certain annuities and deferred lump sums made under structured settlements in relation to persons who have suffered a serious personal injury.
- clarify the exclusion of employment-related worker's compensation claims from the tax exemption; and
- provide a tax exemption for life insurance companies on income derived from assets that support structured settlement annuities and lump sums.
Date of effect : The amendments apply for the 2001-2002 income year and later income years where the date of settlement is on or after 26 September 2001.
Proposal announced : These amendments have not been previously announced.
Financial impact : The cost to revenue is estimated to be between $0.5 million and $1 million each year.
Compliance cost impact : There is no compliance cost impact.