Document ID: chunk:federal_register_of_legislation:C2010C00584:clause:6_25:p4
Version: federal_register_of_legislation:C2010C00584
Segment Type: clause
Provision Reference: sch 6 cl 25 (pt 4/10)
Character Range: 80341–83146

for the income year in which the joining time occurs (see subparagraph 23A(a)(ii) of the Income Tax Rates Act 1986).

713‑550  Treatment of head company's franking account after joining

  Sections 709‑70 and 709‑75 do not apply in relation to a *subsidiary member of a *consolidated group if:
 (a) the subsidiary member is a *life insurance company; or
 (b) a life insurance company that is a *member of the group owns *membership interests, either directly or indirectly through one or more interposed entities, in the subsidiary member.

Annuity payable by life insurance company to another member of a consolidated group

713‑553  Special rules relating to segregated exempt assets

Conditions for sections 713‑555 and 713‑560 to apply

 (1) Sections 713‑555 and 713‑560 apply only if both the conditions in subsections (2) and (3) are met.

Note: Each of those sections sets out extra conditions that must also be met for the section to apply.

 (2) The first condition is that there is a time (the fusion time) when it starts to be the case that both these entities (the fused entities) are *members of a single *consolidated group:
 (a) a *life insurance company;
 (b) an entity (the policyholder) holding an *exempt life insurance policy (the fused entities' policy) that:
 (i) was issued when the policyholder and the life insurance company were not both members of a single consolidated group; and
 (ii) provided for the life insurance company to pay an *immediate annuity to the policyholder.

 (3) The second condition is that the *head company of the *consolidated group determines the following amounts:
 (a) the total *transfer value of the head company's *segregated exempt assets;
 (b) the amount of the head company's *exempt life insurance policy liabilities;
as at a time (the determination time) that is the fusion time or, if the head company does not determine those amounts as at the fusion time, the first time after the fusion time as at which the head company determines those amounts.

Note: If the life insurance company becomes a subsidiary member of the consolidated group, that company's segregated exempt assets become segregated exempt assets of the head company of the group because of section 701‑5 (Entry history rule) and section 713‑505 (Head company treated as a life insurance company).

Object of sections 713‑555 and 713‑560

 (4) The object of sections 713‑555 and 713‑560 is to ensure that the *head company of the *consolidated group:
 (a) does not have excessive amounts included in its assessable 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;