Document ID: chunk:federal_register_of_legislation:C2010C00584:clause:6_25:p5
Version: federal_register_of_legislation:C2010C00584
Segment Type: clause
Provision Reference: sch 6 cl 25 (pt 5/10)
Character Range: 82890–85768

income because section 701‑1 (Single entity rule) treats the fused entities as one so liabilities under the fused entities' policy do not contribute to the amount of the head company's *exempt life insurance policy liabilities as at the determination time; and
 (b) has amounts included in its assessable income, or is allowed deductions, to reflect what would have happened to the fused entities if they had not both been *members of the group at any time between the fusion time and the determination time when they were both members of the group.

713‑555  Transfer from segregated exempt assets because policyholder and life insurance company are in group

Application

 (1) This section applies if:
 (a) as at the determination time, the total *transfer value of the *segregated exempt assets of the *head company of the *consolidated group exceeds the amount of that company's *exempt life insurance policy liabilities, wholly or partly because:
 (i) those assets include assets out of which exempt life insurance policy liabilities attributable to the fused entities' policy were to have been discharged; and
 (ii) while both the fused entities are members of the group, the liability to pay the *annuity is taken not to exist for the head company core purposes set out in section 701‑1 (Single entity rule), because one or more applications of that section treat the fused entities as one entity; and
 (b) because of that excess, the head company transfers under subsection 320‑235(1) or 320‑250(2), from its segregated exempt assets, assets (the policy assets) whose total transfer value equals the amount of the excess attributable to the matters described in subparagraphs (a)(i) and (ii).
However, this section does not apply if the policyholder ceases to be a *member of the consolidated group between the fusion time and the determination time.

Note: Subsections 320‑235(1) and 320‑250(2) require a life insurance company to transfer assets from its segregated exempt assets if, at certain times, the total transfer value of the segregated exempt assets exceeds the amount of the company's exempt life insurance policy liabilities.

Policy assets' transfer value not included in assessable income

 (2) Paragraph 320‑15(1)(f) does not apply to the transfer of the policy assets.

Note: Paragraph 320‑15(1)(f) includes in a life insurance company's assessable income the transfer values of assets transferred by the company from the company's segregated exempt assets under subsection 320‑235(1) or 320‑250(2).

Extra assessable income if policy is not a qualifying security

 (3) If the fused entities' policy is not a qualifying security (as defined in section 159GP of the Income Tax Assessment Act 1936), the assessable income of the *head company of the *consolidated group for the income year in which the company transfers the policy assets includes the