GST issues registers

Insurance industry partnership

11 Section 78-50

Issue

The last time for receipt of the notification of the insured's entitlement to input tax credits on the premium is when the 'claim was first made'. This is not defined. This percentage is required to process decreasing adjustment calculations on Division 78 claims payments and subrogations. Would we be correct in presuming that the date for supplying the taxable percentage would be immediately before a claim payment or subrogation occurs?

Non-interpretative - straight application of the law.

ATO view

When the claim is first made depends on the facts in each case. For example, if a claim has to be made by the claimant submitting a claims form, the claim is not made until that form has been filled out and submitted to the insurer.

If, however, a claim is accepted without a claims form, for example a telephone claim for a window repair where the window repair is made without the claimant ever submitting a claims form, the claim is made when the telephone claim is made. As another example, a claimant may phone a claim in, but no action is taken until and unless a claims form is submitted, the claim is not made until the claims form is submitted.

At a practical level, if the decreasing adjustment is correctly calculated, this is not an issue.

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