Section EY 21 — Income Tax Act 2007: Shareholder base income: profit participation policies

EY 21 Shareholder base income: profit participation policies What is included (1) For an income year, a life insurer has shareholder base income to the extent to which they have an amount for profit participation policies calculated using the formula— asset base gross income × (retained earnings average + future shareholder transfers average) − net transfers. Definition of items in formula (2) In the formula,— (a) asset base gross income is the amount of annual gross income that the life insurer would have for the profit participation policies' asset base, if–– (i) the life insurer is treated as having no assets other than the asset base; and (ii) amounts under sections EY 28 and EY 29 are ignored: (b) retained earnings average is an actuarially determined amount that is the average of the following 2 proportions: (i) the proportion of the value of the policies' asset base that is attributable to the life insurer's shareholder's retained earnings at the end of the year before the income year: (ii) the proportion of the value of the policies' asset base that is attributable to the life insurer's shareholder's retained earnings at the end of the income year: (c) future shareholder transfers average is an actuarially determined amount that is the average of the following 2 proportions: (i) the proportion of the value of the policies' asset base that is attributable to the present value (net) of future transfers to the life insurer's shareholders for future bonus declarations that are able to be supported by the supporting asset base at the beginning of the income year: (ii) the proportion of the value of the policies' asset base that is attributable to the present value (net) of future transfers to the life insurer's shareholders for future bonus declarations that are able to be supported by the supporting asset base at the end of the income year: (d) net transfers is the amount transferred to the benefit of policyholders from shareholders in relation to profit participation policies. Defined in this Act: actuarially determined , amount , annual gross income , asset base , income , income year , life insurer , present value (net) , profit participation policy , shareholder base income , supporting asset base Section EY 21: substituted, on 1 July 2010, by section 190(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section EY 21(2)(b)(i): amended, on 1 July 2010, by section 36(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section EY 21(2)(b)(ii): amended, on 1 July 2010, by section 36(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section EY 21(2)(d): amended, on 1 July 2010, by section 36(3) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).