Section EZ 1 — Income Tax Act 2007: Life insurers acquiring property before 1 April 1988

EZ 1 Life insurers acquiring property before 1 April 1988 When this section applies (1) This section applies when section DZ 2 (Life insurers acquiring property before 1 April 1988) applies. Amount of deduction (2) The amount of the deduction is calculated using the formula— specific liability × property sum. total liability Definition of items in formula (3) The items in the formula are defined in subsections (4) to (9). Specific liability (4) Specific liability is the amount in the life insurer’s total liability on the last day of the 1987–88 income year for the following matters covered by the life insurer’s Life Insurance Fund: (a) superannuation policies; and (b) pre-1983 mortgage repayment insurance policies; and (c) annuities that have been granted. Total liability (5) Total liability is the life insurer’s liability for life insurance policies on the last day of the 1987–88 income year. Property sum (6) The property sum is calculated under whichever is relevant of subsections (7) to (9). Property acquired before last day of 1982–83 income year (7) For property acquired on or before the last day of the 1982–83 income year, the property sum is calculated by subtracting the specified base cost for 1983 income year property from the market value of the property on 1 April 1988. Property acquired after end of 1982–83 income year: not financial arrangement (8) For property acquired after the end of the 1982–83 income year that is not a financial arrangement, the property sum is calculated by subtracting the cost price or acquisition value of the property from the market value of the property on 1 April 1988. Property acquired after end of 1982–83 income year: financial arrangement (9) For property acquired after the end of the 1982–83 income year that is a financial arrangement, the property sum is the base price adjustment for the arrangement, calculated as if the arrangement had matured on 1 April 1988 but using the formula in section EW 31 (Base price adjustment formula). Timing of deduction (10) The life insurer is allowed the deduction in the income year in which they dispose of the property. Defined in this Act: amount , deduction , financial arrangement , income year , Life Insurance Fund , life insurance policy , life insurer , property , specified base cost for 1983 income year property , superannuation policy , Compare: 2004 No 35 s EZ 1