Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-35 - INSURANCE BUSINESS  

Division 320 - Life insurance companies  

Guide to Division 320  

SECTION 320-1   What this Division is about  


This Division provides for the taxation of life insurance companies in a broadly comparable way to other entities that derive similar kinds of income.

Because of the nature of the business of life insurance companies, the Division contains special rules for working out their taxable income.

Those rules:

  • · include certain amounts in assessable income;
  • · identify certain amounts of exempt income and non-assessable non-exempt income;
  • · identify specific deductions.
  • Life insurance companies can have one or both of these taxable incomes for any income year for the purposes of working out their income tax for that year:

  • · a taxable income of the complying superannuation class, which consists of taxable income that relates to complying superannuation business, and is taxed at the rate of tax that applies to complying superannuation funds;
  • · a taxable income of the ordinary class, which consists of taxable income that relates to other businesses and is taxed at the corporate tax rate.
  • Life insurance companies can also have tax losses that correspond to those 2 classes. The Division provides that tax losses of a particular class can be deducted only from incomes in respect of that class.

    The Division ensures that the income tax worked out on the basis of these taxable incomes and tax losses is a single amount of income tax on one taxable income.

    The Division also contains rules for segregating the assets of life insurance companies into:

  • · assets that relate to complying superannuation business;
  • · assets that relate to immediate annuity and other exempt business.
  • This Division also ensures that life insurance companies that are RSA providers are liable to pay tax on no-TFN contributions income.


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