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INCOME TAX ASSESSMENT ACT 1997 - SECT 320.37

Non-assessable non-exempt income

             (1)  These amounts * derived by a * life insurance company are not assessable income and are not * exempt income:

                     (a)  amounts of ordinary income and statutory income derived from * segregated exempt assets, being income that relates to the period during which the assets were segregated exempt assets;

                     (b)  amounts of ordinary income and statutory income derived from the * disposal of units in a * pooled superannuation trust;

                     (c)  if an * Australian/overseas fund or an * overseas fund established by the company derived foreign establishment amounts--the foreign resident proportion of the foreign establishment amounts;

                     (d)  if the company is a * friendly society:

                              (i)  amounts derived before 1 July 2001 that are exempt from income tax under section 50-1; and

                             (ii)  amounts derived on or after 1 July 2001 but before 1 January 2003, that are attributable to * income bonds, * funeral policies or * sickness policies; and

                            (iii)  amounts derived on or after 1 July 2001 but before 1 January 2003, that are attributable to * scholarship plans and would have been exempt from income tax under section 50-1 if they had been received before 1 July 2001; and

                            (iv)  amounts derived on or after 1 January 2003 that are attributable to income bonds, funeral policies or * sickness policies, that were issued before 1 January 2003; and

                             (v)  amounts derived on or after 1 January 2003 that are attributable to scholarship plans issued before 1 January 2003 and that would have been exempt from income tax if they had been received before 1 July 2001.

Note:          The effect of this section is modified when the life insurance business of a life insurance company is transferred to another life insurance company: see section 320- 325.

          (1A)  For the purposes of paragraph (1)(c), foreign establishment amounts for the * life insurance company means the total amount of assessable income that was * derived in the income year:

                     (a)  in the course of the carrying on by the company of a business in a foreign country at or through a * permanent establishment of the company in that country; and

                     (b)  from sources in that or any other foreign country; and

                     (c)  from assets that:

                              (i)  are attributable to the permanent establishment; and

                             (ii)  are held to meet the liabilities under the * life insurance policies issued by the company at or through the permanent establishment.

             (2)  For the purposes of paragraph (1)(c), the foreign resident proportion of the * foreign establishment amounts is the amount worked out using the formula:

where:

"all foreign establishment policy liabilities" means the average value for the income year (as calculated by an * actuary) of the policy liabilities (as defined in the * Valuation Standard) for all * life insurance policies that:

                     (a)  were included in the class of * life insurance business to which the company's * Australian/overseas fund or * overseas fund relates; and

                     (b)  were issued by the company at or through the * permanent establishment to which the foreign establishment amounts relate.

"foreign resident foreign establishment policy liabilities" means the average value for the income year (as calculated by an * actuary) of the policy liabilities (as defined in the * Valuation Standard) for all * life insurance policies that:

                     (a)  are * foreign resident life insurance policies; and

                     (b)  were issued by the company at or through the * permanent establishment to which the foreign establishment amounts relate.



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