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DQ 4: Environmental restoration accounts scheme
or “Tax deductions for payments into environmental restoration accounts”
You could also call this:

“Life insurers can deduct certain expenses from policyholder income for tax purposes”

If you are a life insurer, you might have something called a policyholder base allowable deduction for a year. This is an amount that you can take off your income when working out your taxes. Even if this amount isn’t listed as a deduction in this part of the law, and even if it’s not blocked from being a deduction, you can still use it to reduce your income for that year.

However, you can’t use this deduction against your shareholder base income. There’s another part of the law, Section EY 2, that talks about how you can use these deductions against your policyholder base income. It also covers deductions related to money earned by your life fund PIE (a special type of investment) if it’s a multi-rate PIE.

These rules override the general permission in the tax law. This means that even if other parts of the law say you can’t make this deduction, these specific rules allow you to do so.

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Next up: DR 2: Shareholder base allowable deduction of life insurer

or “Life insurers can deduct certain expenses from their shareholder income, but not from policyholder income”
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Part D Deductions
Life insurance business expenditure

DR 1Policyholder base allowable deduction of life insurer

  1. If, but for this section, a life insurer has an amount of policyholder base allowable deduction for an income year and that amount is neither a deduction under this Part nor denied as a deduction under this Part, the amount is a deduction of the life insurer for the income year.

  2. A policyholder base allowable deduction is not allowed against shareholder base income. Section EY 2 (Policyholder base) deals with allowing policyholder base allowable deductions against policyholder base income, and deals with deductions that relate to the life insurer's schedular income derived by their life fund PIE that is a multi-rate PIE.

  3. Subsections (1) and (2) override the general permission.

Notes
  • Section DR 1: substituted, on , by section 94(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).