Commonwealth Consolidated Acts

INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 320.225

             (1)  This section applies to an asset (an approved asset ) of a life insurance company if:

                     (a)  the asset was acquired by the company before 1 July 2000; and

                     (b)  the asset is held in an Australian fund or an Australian/overseas fund of the company; and

                     (c)  the market value of the asset at that date exceeds whichever is the lesser of:

                              (i)  $50,000,000; or

                             (ii)  whichever is the greater of 2% of the value of that fund at that date or $5,000,000.

             (2)  If the life insurance company wishes to include a part of an approved asset in its segregated exempt assets before 1 October 2000, the company must, before that date, certify in writing the part (if any) of the asset to be included in the segregated exempt assets.

             (3)  If the life insurance company so certifies, the part of the asset stated in the certificate is to be treated as a separate asset of the company.

320-230   Transfers of assets to segregated exempt assets

             (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.

             (2)  If a life insurance company that is a friendly society segregates any of its assets in accordance with section 320- 225 of the Income Tax Assessment Act 1997 in the 2000-01 income year, the calculation of the transfer values of the company's segregated exempt assets as at the end of that income year is to be made not later than 90 days after the end of that income year.

Table of Subdivisions

Table of sections

322-25      Application of section 322- 25 of the Income Tax Assessment Act 1997

322-30      Application of section 322-30 of the Income Tax Assessment Act 1997