GST issues registers
Insurance industry partnership18 Excesses and 78-70
Issue
Where an insured has an excess and the insurer provides them settlement funds for the amount above the excess and the insured pays the funds plus the amount it was not insured for (that is the excess) to a third party in settlement of a liability, what amounts do section 78-70 apply to?
Non-interpretative - straight application of the law.
ATO view
The amount exclusive of the excess.
Section 78-70 applies where 'the payment is covered by a settlement of a claim' (paragraph 78-170(1)(b)) or where 'the supply is covered by a settlement of a claim' (paragraph 78-170(2)(b)). Only the amount paid by the insurer to the insured is covered by the settlement of a claim.
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