Document ID: chunk:federal_register_of_legislation:C2010C00584:clause:6_25:p6
Version: federal_register_of_legislation:C2010C00584
Segment Type: clause
Provision Reference: sch 6 cl 25 (pt 6/10)
Character Range: 85526–88279

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 amount worked out using the formula:
where:

reduced purchase price of the annuity means the reduced purchase price of the *annuity as at the determination time worked out under Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936 as if the determination time (rather than the fusion time) had been the first time at which both the fused entities were *members of the *consolidated group.

Assessable income or deduction if policy is a qualifying security

 (4) If the fused entities' policy is a qualifying security (as defined in section 159GP of the Income Tax Assessment Act 1936), section 159GS (Balancing adjustment on transfer of qualifying security) of that Act applies as if:
 (a) the *head company of the *consolidated group:
 (i) had been the holder (as defined in section 159GP of that Act) of the policy; and
 (ii) had transferred the policy when it transferred the policy assets; and
 (b) the transfer price had equalled the total *transfer value of the policy assets; and
 (c) the determination time (rather than the fusion time) had been the first time at which both the fused entities were *members of the consolidated group.

Note: If the policyholder becomes a subsidiary member of the consolidated group, section 701‑5 (Entry history rule) treats the head company as if anything that had happened to the policyholder before it became a subsidiary member of the group had happened to the head company.

713‑560  If valuation of segregated exempt assets is delayed

Application

 (1) This section applies if there is a period (the gap) between:
 (a) the fusion time; and
 (b) the determination time or the time at which the policyholder ceases to be a *member of the *consolidated group, whichever is earlier;
when the fused entities are both members of the consolidated group.

Continuation of exempt life insurance policy during the gap

 (2) For the head company core purposes mentioned in section 701‑1 (Single entity rule), Division 320 applies in relation to the fused entities' policy as if it continued to be an *exempt life insurance policy during the gap, even though both the fused entities were *members of the *consolidated group.

Transfer from segregated assets to provide for annuity payments

 (3) During the gap, the *head company of the *consolidated group may transfer an asset from the head company's *segregated exempt assets to provide for payments of the *immediate annuity under the fused entities' policy.

Effect of transfer

 (4) If