Document ID: chunk:federal_register_of_legislation:C2024A00052:clause:6_27:p1
Version: federal_register_of_legislation:C2024A00052
Segment Type: clause
Provision Reference: sch 6 cl 27 (pt 1/2)
Character Range: 48011–50650

27  Transitional—special provision for certain income years

Election for this item to apply
(1) This item applies to a general insurance company for the following income years (each a relevant income year) if the company chooses for this item, instead of item 26, to apply to the company:
 (a) the start year;
 (b) the following 4 income years.
(2) The choice:
 (a) is irrevocable; and
 (b) must be made in the approved form by the earlier of:
 (i) the day by which the company's income tax return for the start year is due to be lodged; and
 (ii) the day on which that income tax return is lodged.
Note: The Commissioner may defer the time for giving the choice: see section 388‑55 in Schedule 1 to the Taxation Administration Act 1953.

Interaction with other amendments
(3) This item has effect in addition to the operation of the Income Tax Assessment Act 1997, as amended by this Schedule, provided for by item 25 of this Schedule.

Provision for, and payment of, claims by general insurance companies
(4) If:
 (a) the value, at the end of the income year before the start year, of the company's liability for outstanding claims under general insurance policies as worked out:
 (i) under section 321‑20 of the Income Tax Assessment Act 1997 as in force immediately before the commencement of this Schedule; and
 (ii) not under that section as amended by this Schedule; exceeds
 (b) the value, at the end of the income year before the start year, of the company's adjusted liability for incurred claims under general insurance policies as worked out under section 321‑20 of that Act as amended by this Schedule;
 the company's assessable income for each relevant income year includes an amount equal to one‑fifth of the excess.
(5) If:
 (a) the value, at the end of the income year before the start year, of the company's adjusted liability for incurred claims under general insurance policies as worked out under section 321‑20 of the Income Tax Assessment Act 1997 as amended by this Schedule; exceeds
 (b) the value, at the end of the income year before the start year, of the company's liability for outstanding claims under general insurance policies as worked out:
 (i) under section 321‑20 of that Act as in force immediately before the commencement of this Schedule; and
 (ii) not under that section as amended by this Schedule;
 the company can deduct for each relevant income year an amount equal to one‑fifth of the excess.

Premium income of general insurance companies
(6) If:
 (a) the value, at the end of the income year before the start year, of the company's unearned premium reserve as worked out:
 (i) under section