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24 Nov 09 ATO focus on life insurance policies issued from tax havens - TA 2009/17

In a media release issued on 23 November 2009, the ATO announced the release of Taxpayer Alert TA 2009/17 entitled "Life insurance bonds issued by tax haven entities". It warns taxpayers to be cautious about investing in life insurance policies issued from insurance companies based in tax havens, such as Vanuatu.

Under these arrangements, promoters market certain life insurance policies as life insurance bonds for Australian tax purposes and that as a result investors will be able to qualify for concessional tax treatment, such as capital gains tax exemption and the special rules applicable to reversionary bonuses paid. However these policies may not qualify for such benefits and self managed super funds may also breach the superannuation regulations for complying funds.

“People considering these arrangements should be aware their tax affairs will be closely examined by the [ATO], in addition to potential action by other government agencies as part of Project Wickenby,” the Commissioner, Michael D'Ascenzo said.

For a copy of the ATO media release, No 2009/62, go here

For a copy of TA 2009/17, go here

 


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