Document ID: chunk:federal_register_of_legislation:C2010C00584:clause:6_26:p1
Version: federal_register_of_legislation:C2010C00584
Segment Type: clause
Provision Reference: sch 6 cl 26 (pt 1/3)
Character Range: 97415–100314

26  At the end of Division 713
Add:

Subdivision 713‑M—General insurance companies

Guide to Subdivision 713‑M

713‑700  What this Subdivision is about

      This Subdivision sets out special rules for a general insurance company becoming or ceasing to be a subsidiary member of a consolidated group.

Table of sections

Tax cost setting rules for general insurance companies joining consolidated group

713‑705 Certain assets taken to be retained cost base assets where general insurance company joins group

Liabilities and reserves of general insurance companies joining and leaving consolidated groups

713‑710 Treatment of liabilities and reserves for income year when general insurance company joins or leaves group
713‑715 If general insurance company joins consolidated group
713‑720 If general insurance company leaves consolidated group

Tax cost setting rules for general insurance companies joining consolidated group

713‑705  Certain assets taken to be retained cost base assets where general insurance company joins group

 (1) This section applies if:
 (a) a *general insurance company becomes a *subsidiary member of a *consolidated group at a time (the joining time); and
 (b) that company has demutualised under Division 9AA of Part III of the Income Tax Assessment Act 1936; and
 (c) in the period starting just after the company demutualises and ending at the joining time, all of the *membership interests in the company were owned by the same group.

 (2) A goodwill asset of the company just before the joining time is a retained cost base asset.

 (3) The goodwill asset's *tax cost setting amount is its amount (worked out in accordance with subsection 121AN(2) of the Income Tax Assessment Act 1936) on the applicable accounting day (see subsection 121AN(4) of that Act).

Liabilities and reserves of general insurance companies joining and leaving consolidated groups

713‑710  Treatment of liabilities and reserves for income year when general insurance company joins or leaves group

  Sections 713‑715 and 713‑720 affect how sections 321‑10, 321‑15, 321‑50 and 321‑55 in Schedule 2J to the Income Tax Assessment Act 1936 (the affected sections) apply in relation to these values (the affected values):
 (a) the value of the outstanding claims liability of a *general insurance company under *general insurance policies that is worked out under section 321‑20 in Schedule 2J to the Income Tax Assessment Act 1936;
 (b) the value of the unearned premium reserve of a general insurance company under general insurance policies that is worked out under section 321‑60 in that Schedule.

Note 1: Sections 321‑10 and 321‑15 in that Schedule both operate on the basis of a comparison of the value of the outstanding claims liability of a general insurance company at the end of the current year with the value of that liability at the end of the previous income year,