Commonwealth Consolidated Acts Commonwealth Consolidated ActsPart 1 -- Income tax consequences
Income Tax Assessment Act 1997
1 Section 11 - 5 (after table item headed "health")
Insert:
HIH rescue package |
|
HIH Claims Support Trust .................. | 322 - 10 |
2 Subsection 104 - 10(5) (note)
Omit "Note", substitute "Note 1".
3 At the end of subsection 104 - 10(5)
Add:
Note 2: A capital gain or loss you make because you assign a right under or in relation to a general insurance policy you held with an HIH company to the Commonwealth, the trustee of the HIH Trust or a prescribed entity is also disregarded: see section 322 - 15.
4 Part 3 - 35 (heading)
Repeal the heading, substitute:
Part 3 - 35 -- Insurance business
5 Section 320 - 255 (link note)
Repeal the link note.
6 After Division 320
Insert:
Division 322 -- HIH rescue package
322 - 1 What this Division is about
This Division sets out special measures to assist in the rescue package provided in response to the collapse of the HIH group.
Table of sections
Operative provisions
322 - 5 Rescue payments treated as insurance payments by HIH
322 - 10 HIH Trust exempt from tax
322 - 15 Certain capital gains and capital losses disregarded
[This is the end of the Guide.]
322 - 5 Rescue payments treated as insurance payments by HIH
(1) This Act applies to you as if a payment you receive from the Commonwealth, the * HIH Trust or a prescribed entity for assignment of your rights under or in relation to a * general insurance policy you held with an * HIH company:
(a) had been made by the HIH company; and
(b) had been made under the terms and conditions of the general insurance policy you held with the HIH company.
(2) The HIH Trust is the HIH Claims Support Trust (established on 6 July 2001).
(3) An HIH company is:
(a) CIC Insurance Limited; or
(b) FAI General Insurance Company Limited; or
(c) FAI Reinsurances Pty Limited; or
(d) FAI Traders Insurance Company Pty Limited; or
(e) HIH Casualty and General Insurance Limited; or
(f) HIH Underwriting and Insurance (Australia) Pty Limited; or
(g) World Marine and General Insurances Pty Limited; or
(h) another related company specified in writing by the Commissioner.
322 - 10 HIH Trust exempt from tax
The total * ordinary income and * statutory income of:
(a) the HIH Trust; and
(b) an entity prescribed for the purposes of this Division;
is exempt from income tax.
322 - 15 Certain capital gains and capital losses disregarded
A * capital gain or * capital loss you make because you assign a right under or in relation to a * general insurance policy you held with an * HIH company to the Commonwealth, the trustee of the * HIH Trust or a prescribed entity is disregarded.
[The next Part is Part 3 - 45.]
7 Subsection 995 - 1(1)
Insert:
"HIH company" has the meaning given by section 322 - 5.
8 Subsection 995 - 1(1)
Insert:
"HIH Trust" has the meaning given by section 322 - 5.
9 Application
The amendments made by this Part apply to things done on or after 15 May 2001.
Part 2 -- Goods and services tax consequences
A New Tax System (Goods and Services Tax) Act 1999
9A After section 78 - 115
Insert:
(1) If an insurer (the first insurer ) enters into an arrangement, in the nature of a portfolio transfer, with another insurer for the other insurer:
(a) to act as the insurer in relation to an * insurance policy; or
(b) to meet the first insurer's liabilities arising under an insurance policy;
this Division applies, from the time the arrangement takes effect, as if the other insurer were an insurer in relation to the policy.
(2) Without limiting subsection ( 1):
(a) anything done after that time by the other insurer that, if it had been done by the first insurer, would have been done under the policy is taken, for the purposes of this Division, to have been done by the other insurer under the policy; and
(b) sections 78 - 10 and 78 - 30 apply as if the other insurer were the insurer that supplied the policy; and
(c) section 78 - 18 applies as if the insurer that settles the claim referred to in paragraph 78 - 18(1)(b) or (3)(b) (as the case requires) has the * increasing adjustment under that section, regardless of which insurer was paid the excess to which the adjustment relates.
10 At the end of Subdivision 78 - F
Add:
(1) If a payment of * money, a supply or both a payment of money and a supply are received by an entity from an * HIH rescue entity as * consideration for:
(a) the entity transferring or surrendering rights under an * insurance policy held with an * HIH company; or
(b) the entity transferring or surrendering rights against another entity that is insured under an insurance policy held with an HIH company; or
(c) the entity transferring or surrendering rights against another entity in relation to a matter in relation to which the entity also has or had rights under an insurance policy held with an HIH company;
this Division (other than sections 78 - 10, 78 - 15 and 78 - 40) applies to the payment or supply as if the HIH rescue entity made the payment or supply as the insurer in settlement of a claim under the insurance policy.
(2) In particular:
(a) this Division (other than sections 78 - 10, 78 - 15 and 78 - 40, subsection 78 - 50(1) and this section) applies as if:
(i) references to an insurer were references to the * HIH rescue entity; and
(ii) references to a claim under an * insurance policy were references to a request or claim to the HIH rescue entity for such a payment or supply; and
(iii) references to a settlement of such a claim were references to the agreement to make such a payment or supply as consideration for the transfer or surrender; and
(b) sections 78 - 18, 78 - 42 and 78 - 55 apply as if references in those sections to payments of excess to the insurer under the policy were references to payments to the HIH rescue entity corresponding to such payments of excess; and
(c) section 78 - 30 applies as if references in that section to settling a claim were references to providing the consideration for the transfer or surrender; and
(d) section 78 - 100 applies as if references in that section to a claim for compensation under a * statutory compensation scheme were references to a claim made to the HIH rescue entity corresponding to a claim for compensation under the scheme.
(3) This section does not affect the operation of sections 78 - 10, 78 - 15 and 78 - 40.
11 Section 188 - 22
Omit all the words after " * consideration", substitute:
for the supply:
(a) is a payment of * money, or a supply, by an insurer in settlement of a claim under an * insurance policy; or
(b) is a payment of money, or a supply, by an * HIH rescue entity in the circumstances referred to in subsection 78 - 120(1).
12 Section 195 - 1
Insert:
"HIH company" has the meaning given by section 322 - 5 of the * ITAA 1997.
13 Section 195 - 1
Insert:
"HIH rescue entity" means:
(a) the HIH Claims Support Trust (established on 6 July 2001); or
(b) the Commonwealth; or
(c) an entity prescribed for the purposes of subsection 322 - 5(1) of the * ITAA 1997.
14 Application
(1) The amendments made by this Part apply, and are taken to have applied:
(a) in relation to net amounts for tax periods starting, or that started, on or after 15 March 2001; and
(b) in relation to payments and supplies, of a kind referred to in section 78 - 120 of the A New Tax System (Goods and Services Tax) Act 1999 , that are, or have been, made on or after 15 March 2001 to an entity that is neither registered nor required to be registered.
(2) However, the amendment made by item 9A applies, and is taken to have applied in relation to net amounts for tax periods starting, or that started, on or after 1 January 2001.