Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 713 - Rules for particular kinds of entities  

Subdivision 713-L - Life insurance companies  

Tax cost setting rules for life insurance companies leaving consolidated group

SECTION 713-580   Valuing certain liabilities where life insurance company leaves group  

713-580(1)    
Despite section 711-45 , if the leaving entity mentioned in step 4 in the table in section 711-20 is a ^* life insurance company, the leaving entity ' s liabilities mentioned in this section are to be valued as mentioned in this section.

713-580(2)    
To avoid doubt, those liabilities are the liabilities that become those of the leaving entity because section 701-1 (Single entity rule) ceases to apply to the leaving entity when it ceases to be a ^* subsidiary member of the group.

713-580(3)    

The value of the leaving entity ' s ^* complying superannuation liabilities (if any) is the amount worked out under section 320-190 at the leaving time.

713-580(4)    
The value of the leaving entity ' s ^* exempt life insurance policy liabilities (if any) is the amount worked out under section 320-245 at the leaving time.

713-580(5)    
Subsection (6) applies to a liability of the leaving entity if:

(a) the liability is under the ^* net risk component of a ^* life insurance policy; and

(b) the leaving entity could deduct under section 320-80 an amount for the ^* risk component of claims paid under the policy on or after the time it ceased to be a ^* member of the ^* consolidated group.

713-580(6)    
The value of that liability is the ^* current termination value of the ^* net risk component of the ^* life insurance policy at the leaving time (calculated by an ^* actuary).

713-580(7)    

The value of the leaving entity ' s liabilities under the ^* net investment component of ordinary life insurance policies is the amount worked out for those liabilities under subsection 320-190(2) as if those liabilities were ^* complying superannuation liabilities.