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Income Tax Act 2007

Deductions - Life insurance business expenditure

DR 2: Shareholder base allowable deduction of life insurer

You could also call this:

“Life insurers can deduct certain expenses from their shareholder income, but not from policyholder income”

If you are a life insurer, you might have something called a shareholder base allowable deduction for a year. This is an amount that isn’t a normal deduction or something that’s not allowed as a deduction. If you have this kind of deduction, you can use it to reduce your income for that year.

However, you can’t use this shareholder base allowable deduction to lower your policyholder base income. This means you can’t use it to reduce the income that relates to your insurance policies.

These rules are very important and they override the general permission in the tax law. This means that even if other parts of the tax law might say something different, you still have to follow these specific rules for shareholder base allowable deductions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514015.

Topics:
Money and consumer rights > Taxes
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DR 1: Policyholder base allowable deduction of life insurer, or

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

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DR 3: Life reinsurance premiums to reinsurer outside New Zealand, or

“Rules for claiming deductions on life reinsurance premiums paid to overseas reinsurers”

Part D Deductions
Life insurance business expenditure

DR 2Shareholder base allowable deduction of life insurer

  1. If, but for this section, a life insurer has an amount of shareholder 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 shareholder base allowable deduction is not allowed against policyholder base income.

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

Notes
  • Section DR 2: substituted, on , by section 94(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).