Tax Laws Amendment (2004 Measures No. 2) Act 2004 (83 of 2004)

Schedule 1   Life insurance companies

Part 1   Amendments commencing on 30 June 2000

Income Tax (Transitional Provisions) Act 1997

83   Subsection 320-230(1)

Repeal the subsection, substitute:

(1) If:

(a) a life insurance company had a liability before 1 July 2000 under a life insurance policy where the income of the company attributable to the liability was exempt from tax before that date; and

(b) the liability or a part of the liability is to be discharged out of the company's segregated exempt assets; and

(c) there is a transfer of the company's assets to the segregated exempt assets to meet that liability or that part of the liability;

then, to the extent to which the assets are transferred to meet that liability or that part of the liability:

(d) if the transfer occurs before 1 October 2000 - the transfer is to be disregarded for the purposes of the Income Tax Assessment Act 1997; or

(e) if the transfer occurs on or after 1 October 2000 - the transfer is to be disregarded for the purposes of that Act, except:

(i) section 320-255 of that Act; and

(ii) any other provisions that rely on the operation of that section (for example, paragraph 320-15(1)(g) of that Act).

Note: This means, amongst other things, that a life insurance company to which this subsection applies will not be able to claim a deduction in respect of the transfer under subsection 320-105(1) of that Act.

(1A) If subsection (1) has applied to a life insurance company in respect of a transfer of assets to meet a liability or a part of a liability, that subsection does not apply again in respect of another transfer of assets to meet that liability or that part of the liability.