TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989 - SECT 20
TAXATION LAWS AMENDMENT (SUPERANNUATION) ACT 1989No. 105, 1989 - SECT 20
20. Before section 116D of the Principal Act the following sections are
inserted: Classes of assessable income and policies
"116CA. (1) The following table sets out the classes of assessable income for
ordinary life assurance companies (working from the highest to the lowest) and
(where applicable) the corresponding classes of policy:
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-- ORDINARY LIFE ASSURANCE COMPANIES - ASSESSABLE INCOME CLASSES
Item Assessable income class Policy class
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-- 1 NCS (Non-Complying Superannuation) NCS policy
2 CS/RA (Complying Superannuation/Roll-over Annuity) CS policy or
RA
policy
3 Non-fund
4 AD/RLA (Accident, Disability/Residual Life Assurance) AD/RLA policy
"(2) The following table sets out the classes of assessable income for SGIOs
(with the higher class first) and the corresponding classes of policy:
SGIOs - ASSESSABLE INCOME CLASSES
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-- Item Assessable income class Policy
class
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-- 1 NCS (Non-Complying Superannuation) NCS policy
2 CS/RA (Complying Superannuation/Roll-over Annuity) CS policy or
RA
policy Notional Part IIIA disposals of fund assets
"116CB. (1) The core amounts for a notional Part IIIA disposal of a fund asset
are as follows:
(a) any ordinary 25/25A amount;
(b) any ordinary 51/52 amount;
(c) any modified 25/25A amount;
(d) any modified 51/52 amount;
(e) any ordinary 160Z gain amount;
(f) any ordinary 160Z loss amount;
(g) any modified 160Z gain amount;
(h) any modified 160Z loss amount.
"(2) For the purposes of subsection (3), the core amounts for a notional Part
IIIA disposal of a fund asset shall be distributed between the classes of fund
assessable income using the formula:
Liabilities for class
Core amount X ---------------------
Total liabilities where:
Core amount is the core amount;
Liabilities for class is so much of the calculated liabilities of the company
at the end of the year of income as, in the opinion of the Commissioner, is
referable to policies of the class concerned that are included in the fund in
which the asset was included immediately before disposal;
Total liabilities is so much of the calculated liabilities of the company at
the end of the year of income as, in the opinion of the Commissioner, is
referable to all policies included in that fund (other than exempt policies).
"(3) The following provisions apply to the core amounts for a notional Part
IIIA disposal of a fund asset:
(a) for an ordinary 25/25A amount:
(i) so much as is distributed to the CS/RA class shall not be
included in assessable income; and
(ii) so much as is distributed to any other class continues to be
included in assessable income and is allocated to that class;
(b) for an ordinary 51/52 amount:
(i) so much as is allocated to the CS/RA class is not allowable as
a deduction; and
(ii) so much as is allocated to any other class continues to be
allowable as a deduction and shall be taken for the purposes of
section 116CF to relate exclusively to assessable income of the
class concerned;
(c) for a modified 25/25A amount:
(i) so much as is distributed to the CS/RA class shall be included
in assessable income and is allocated to that class; and
(ii) so much as is distributed to any other class shall not be
included in assessable income;
(d) for a modified 51/52 amount:
(i) so much as is distributed to the CS/RA class is allowable as a
deduction and shall be taken for the purposes of section 116CF
to relate exclusively to that class; and
(ii) so much as is distributed to any other class is not allowable
as a deduction;
(e) so much of any ordinary 160Z gain amount or ordinary 160Z loss amount
as is distributed to a class other than the CS/RA class is taken into
account in determining the overall 160Z gain or overall 160Z loss for
the class concerned;
(f) so much of any modified 160Z gain amount or modified 160Z loss amount
as is distributed to the CS/RA class is taken into account in
determining the overall 160Z gain or overall 160Z loss for that class.
"(4) In this section:
'policy' means:
(a) a life assurance policy; or
(b) an AD policy. Notional Part IIIA disposals of non-fund assets
"116CC. (1) The core amounts for a notional Part IIIA disposal of a non-fund
asset are as follows:
(a) any ordinary 25/25A amount;
(b) any ordinary 51/52 amount;
(c) any ordinary 160Z gain amount;
(d) any ordinary 160Z loss amount.
"(2) The following provisions apply to the core amounts for a notional Part
IIIA disposal of a non-fund asset:
(a) the whole of any ordinary 25/25A amount continues to be included in
assessable income and is allocated to the non-fund class;
(b) the whole of any ordinary 51/52 amount continues to be allowable as a
deduction and shall be taken for the purposes of section 116CF to
relate exclusively to the non-fund class;
(c) the whole of any ordinary 160Z gain amount or ordinary 160Z loss
amount is taken into account in determining the overall 160Z gain or
overall 160Z loss for the non-fund class. Assessable income etc. in
relation to 160Z gain amounts
"116CD. (1) Nothing shall be included in the assessable income of a life
assurance company under section 160ZO.
"(2) The assessable income of each class shall include the amount (if any)
that is left over after the overall 160Z gain for that class has been reduced
in accordance with this section.
"(3) If there is an overall 160Z loss for a particular class of assessable
income, the loss shall be applied successively in reduction of overall 160Z
gains for the remaining classes, working from the lowest remaining class with
an overall 160Z gain to the highest remaining class with an overall 160Z gain.
"(4) If there are overall 160Z losses for 2 or more classes, subsection (3)
applies successively to those classes, working from the lowest class to the
highest class.
"(5) In the case of an ordinary life assurance company, any prior year Part
IIIA loss for the immediately preceding year of income shall be applied in
reduction of residual overall 160Z gains for the classes of assessable income
in the following order:
(a) non-fund;
(b) AD/RLA;
(c) CS/RA;
(d) NCS.
"(6) In the case of an SGIO, any prior year Part IIIA loss for the immediately
preceding year of income shall be applied in reduction of residual overall
160Z gains for the classes of assessable income in the following order:
(a) CS/RA;
(b) NCS.
"(7) A reference in section 51AAA to an amount included in assessable income
under section 160ZO includes a reference to an amount included in assessable
income under subsection (2) of this section.
"(8) For the purposes of Part IIIA, a life assurance company shall not be
taken to have incurred any net capital loss in respect of the year of income
under section 160ZC. Amount of assessable income in particular class
"116CE. (1) The NCS class of assessable income consists of:
(a) any assessable income allocated to that class under subsection 116CB
(3) or section 116CD; and
(b) any assessable income allocated to that class under subsection (5) of
this section.
"(2) The non-fund class of assessable income consists of:
(a) any assessable income allocated to that class under subsection 116CC
(2) or section 116CD; and
(b) any other non-fund assessable income.
"(3) The AD/RLA class of assessable income consists of:
(a) any assessable income allocated to that class under subsection 116CB
(3) or section 116CD;
(b) any assessable income allocated to that class under subsection (5) of
this section; and
(c) AD premiums.
"(4) The CS/RA class of assessable income consists of:
(a) any assessable income allocated to that class under subsection 116CB
(3) or section 116CD;
(b) any assessable income allocated to that class under subsection (5) of
this section;
(c) amounts included in assessable income under section 275; and
(d) specified roll-over amounts paid to the company in the year of income.
"(5) Each amount of assessable income derived from assets included in a
particular one of the insurance funds (other than notional Part IIIA disposals
income) shall be allocated between the classes of fund assessable income using
the formula:
Liabilities for class
Income x ---------------------
Total liabilities where:
Income is the amount of the assessable income to be allocated;
Liabilities for class is so much of the calculated liabilities of the company
at the end of the year of income as, in the opinion of the Commissioner, is
referable to policies of the class concerned that are included in the fund;
Total liabilities is so much of the calculated liabilities of the company at
the end of the year of income as, in the opinion of the Commissioner, is
referable to all policies included in the fund (other than exempt policies).
"(6) In this section, 'policy' means:
(a) a life assurance policy; or
(b) an AD policy. Apportionment of current year deductions between classes
"116CF. (1) Current year deductions or notional Part IIIA disposals deductions
that relate exclusively to a particular class of assessable income shall be
allocated to that class of assessable income.
"(2) To each class of assessable income there shall be allocated an amount of
deductions calculated using the formula:
Income of class
Residual current deductions x ---------------
Total income where:
Residual current deductions is the total of the current year deductions, other
than those to which subsection (1) applies;
Income of class is the number of dollars in the assessable income of the class
concerned (other than amounts included in assessable income under section
116CD);
Total income is the number of dollars in the total assessable income (other
than amounts included in assessable income under section 116CD). Application
of deficit arising for a particular class
"116CG. (1) If there is a deficit for a particular class of assessable income,
the deficit shall be applied successively in reduction of current surpluses
for the remaining classes, working from the lowest remaining class with a
current surplus to the highest remaining class with a current surplus.
"(2) If there are deficits for 2 or more classes, subsection (1) applies
successively to those classes, working from the lowest class to the highest
class. Deduction of prior year losses
"116CH. (1) In the case of an ordinary life assurance company, prior year loss
deductions shall be applied in reduction of residual current surpluses for the
classes of assessable income in the following order:
(a) non-fund;
(b) AD/RLA;
(c) CS/RA;
(d) NCS.
"(2) In the case of an SGIO, prior year loss deductions shall be applied in
reduction of residual current surpluses for the classes of assessable income
in the following order:
(a) CS/RA;
(b) NCS.
"(3) If there are prior year loss deductions of 2 or more of the kinds
specified in section 80AB, those deductions shall be taken into account under
this section in the order determined by section 80AB. Components of taxable
income
"116CJ. The component of taxable income for a particular class of assessable
income is the amount (if any) that is left over after the assessable income of
that class has been reduced in accordance with sections 116CF, 116CG and
116CH.".
