Income Tax Act 2007

Timing and quantifying rules - Life insurance rules - Non-participation policies

EY 16: Policyholder base allowable deductions: non-participation policies

You could also call this:

“Deductible costs for certain life insurance policies”

When you have a life insurance company, there are certain costs they can count as policyholder base allowable deductions. These are special deductions that relate to their insurance business. For a cost to be counted this way, it needs to meet some rules:

It must be about life insurance policies that are savings products, but not ones where you share in the company’s profits. The cost also needs to be connected to certain types of income that the insurance company makes. Lastly, it has to be included in a special calculation.

If a cost meets these rules, the insurance company needs to figure out how much of it they can count as a policyholder base allowable deduction. They do this using specific methods that are explained in another part of the law. These methods help the company work out the right amount to deduct.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515817.

Topics:
Money and consumer rights > Taxes

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EY 15: Policyholder base income: non-participation policies, or

“Income from non-profit-sharing savings policies for life insurers”


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EY 16B: Policyholder base allowable deductions: consideration for investment management services, or

“Deductions for life insurers managing policyholder investments”

Part E Timing and quantifying rules
Life insurance rules: Non-participation policies

EY 16Policyholder base allowable deductions: non-participation policies

  1. For an income year, a life insurer's deduction is included as their policyholder base allowable deduction if it—

  2. relates to life insurance policies that are savings product policies and not profit participation policies; and
    1. relates to income meeting the requirements of section EY 15(1)(a) to (c); and
      1. is included in the amount of policyholder base allowable deduction calculated under subsection (2).
        1. If a deduction meets the requirements of subsection (1)(a) and (b), the amount of the deduction that is policyholder base allowable deduction is calculated using the basis for apportionment in—

        2. section EY 15(2) and (3) with necessary modifications; or
          1. section EY 15(4) with necessary modifications.
            Notes
            • Section EY 16: substituted, on , by section 190(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section EY 16(1): replaced (with effect on 1 July 2010), on , by section 59(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
            • Section EY 16(1): amended (with effect on 1 July 2010), on , by section 82 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
            • Section EY 16(2): replaced (with effect on 1 July 2010), on , by section 59(2) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
            • Section EY 16 list of defined terms premium loading: repealed (with effect on 1 July 2010), on , by section 59(3) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
            • Section EY 16 list of defined terms premium loading formula: repealed (with effect on 1 July 2010), on , by section 59(3) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
            • Section EY 16 list of defined terms policyholder base income: repealed (with effect on 1 July 2010), on , by section 59(3) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
            • Section EY 16 list of defined terms shareholder base allowable deduction: repealed (with effect on 1 July 2010), on , by section 59(3) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).