ATO Interpretative Decision
ATO ID 2002/840 (Withdrawn)
Income Tax
Life Insurance Contracts. Superannuation Master Fund Superannuation PolicyFOI status: may be released
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This ATO ID is withdrawn because the ATO is reviewing the position stated in the ATO ID.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a life insurance company entitled to an exemption under section 320-40 of the Income Tax Assessment Act 1997 (ITAA 1997) if, after 30 June 2000, it adds new members to a superannuation master fund superannuation policy, which was established before 1 July 2000, in the ordinary course of the life insurance company's business?
Decision
Yes. A life insurance company is entitled to an exemption under section 320-40 of the ITAA 1997 if, after 30 June 2000, it adds new members to a superannuation master fund superannuation policy, which was established before 1 July 2000, in the ordinary course of the life insurance Company's business.
Facts
A superannuation master fund superannuation policy was established by a life insurance company in 1997. When it was established, the terms and conditions of the policy entitled the life insurance company to add new members to the policy. During the 2000/01 and 2001/02 years new members were continually added to the policy. Both the establishment of the fund and the addition of new members occurred in the ordinary course of the company's business.
Under the terms of the policy fees and charges remained at the same level both before and after 30 June 2000.
Reasons for Decision
Under subsection 320-40(1) of the ITAA 1997 a life insurance company is entitled to an exemption for one-third of specified management fees in respect of life insurance policies constituted by contracts made with the company before 1 July 2000.
The superannuation master fund policy was established before 1 July 2000 in the ordinary course of the company's business. When it was established, the terms and conditions of the policy entitled the life insurance company to add new members to the policy.
The addition of new members to the policy is allowed by the terms of the policy which was entered into before 1 July 2000.
Therefore the life insurance company is entitled to an exemption for management fees under section 320-40 of the ITAA 1997.
Date of decision: 10 July 2002Year of income: Year ended 30 June 2002
Legislative References:
Income Tax Assessment Act 1997
section 320-40
subsection 320-40(1)
ATO ID 2002/837
ATO ID 2002/838
ATO ID 2002/839
ATO ID 2002/841
ATO ID 2002/842
Keywords
Life assurance expenses
Life assurance
Life assurance industry
Management fees expenses
ISSN: 1445-2782
| Date: | Version: | |
| 10 July 2002 | Original statement | |
| You are here | 7 October 2005 | Archived |
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