Income Tax Assessment Act 1997



Division 54 - Exemption for certain payments made under structured settlements and structured orders  

Subdivision 54-B - Tax exemption for personal injury annuities  

Operative provisions

SECTION 54-35   Payments during the guarantee period on the death of the injured person  

This section applies if the *annuity instrument provides for payments to be made to the *injured person during any part of the period ending 10 years after the *date of the settlement or order (whether the *annuity is expressed to be for the life of the person or for a period of years).

The *annuity instrument may specify a period (the guarantee period ) of up to 10 years after the *date of the settlement or order, during which, if the *injured person dies, the payments (the remaining payments ) for the remainder of the guarantee period that would have been paid to the injured person are to be paid instead to:

(a) the injured person ' s estate; or

(b) a reversionary beneficiary.


For tax exemptions in this situation, see sections 54-65 and 54-70.

If the *annuity instrument provides for the remaining payments to be made to a reversionary beneficiary, the instrument must:

(a) name the beneficiary; and

(b) allow the beneficiary to choose either:

(i) to be paid the amounts of the remaining payments when the injured person would have received them; or

(ii) to commute those payments into a lump sum worked out under subsection (5).

The *injured person ' s estate may only be paid the lump sum worked out under subsection (5) (and not the periodic payments).

The amount of the lump sum under subparagraph (3)(b)(ii) or subsection (4) is the *policy termination value of the *life insurance policy that is the *annuity instrument, as calculated by an *actuary as at the date of the injured person ' s death. In making this calculation, the following are to be disregarded:

(a) any payments of the annuity due to be made after the end of the guarantee period;

(b) any *structured settlement lump sums that are also provided for by that policy.

In this section:

pay to a person
includes pay to the trustee of a trust of which the person is the beneficiary.

pay to the injured person ' s estate
includes pay to the trustee of a trust established by the *injured person ' s will.


Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.