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Income Tax Act 2007

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

EY 18: Policyholder base allowable deductions: profit participation policies

You could also call this:

“Calculating yearly deductions for profit-sharing insurance policies”

You are a life insurer who offers profit participation policies. Each year, you can claim certain deductions for these policies. To figure out how much you can deduct, you need to use a special formula. This formula is explained in another part of the law called section EY 17(1).

When you use this formula, you need to imagine that you only have assets related to these policies. You also need to think of your total yearly deduction for these assets as your income. Lastly, you should ignore any transfers of money in or out.

By using this formula with these special rules, you can work out how much you’re allowed to deduct for your profit participation policies each year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515823.

Topics:
Money and consumer rights > Taxes
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EY 17: Policyholder base income: profit participation policies, or

“Income from profit-sharing insurance policies for policyholders”

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EY 19: Shareholder base income: non-participation policies, or

“Income types counted as shareholder base income for life insurers' non-participation policies”

Part E Timing and quantifying rules
Life insurance rules: Profit participation policies

EY 18Policyholder base allowable deductions: profit participation policies

  1. For an income year, a life insurer has policyholder base allowable deductions equal to the amount they would have, for profit participation policies, under the formula in section EY 17(1), if—

  2. the life insurer is treated as having no assets other than the asset base; and
    1. the item asset base gross income is treated as being the annual total deduction for the policies' asset base; and
      1. the item net transfers is ignored.

        Notes
        • Section EY 18: substituted, on , by section 190(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section EY 18(b): amended, on , by section 34(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
        • Section EY 18(c): added, on , by section 34(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).