Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Taxation of certain entities - Agents

HD 17B: Lloyd’s of London: agents for life insurance

You could also call this:

“Rules for handling taxes on Lloyd's of London life insurance premiums in New Zealand”

This law talks about Lloyd’s of London, a big insurance company, and how they get money from life insurance in New Zealand. Here’s what you need to know:

When Lloyd’s of London gets money from life insurance premiums, someone has to act as their agent. This agent can be the person who pays the premium to Lloyd’s of London, like a broker or agent. Or it could be someone else in special cases.

The agent only has to deal with the tax for the premium they pay to Lloyd’s of London. They don’t have to worry about all the other premiums Lloyd’s gets in a year.

Sometimes, a bank or a special kind of lender might pay the premium for someone else. In this case, the bank or lender isn’t the agent. Instead, the person who gave the bank or lender the money for the premium is the agent for Lloyd’s of London.

This law helps make sure that when Lloyd’s of London gets money from life insurance in New Zealand, there’s always someone responsible for sorting out the taxes, even though Lloyd’s isn’t based here.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS34200.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
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Part H Taxation of certain entities
Agents

HD 17BLloyd’s of London: agents for life insurance

  1. This section applies when Lloyd’s of London derives income from the payment of a premium under section CR 3B (Lloyd’s of London: income from life insurance premiums).

  2. The person treated as agent for Lloyd’s of London is—

  3. a person, including a broker or agent, who pays the premium to Lloyd’s of London; or
    1. a person described in subsection (4)(b).

      1. The person liable as agent is only liable to calculate the taxable income, provide the return and pay the income tax in relation to the premium the person pays to Lloyd’s of London and not in relation to all the premium income of Lloyd’s of London for the tax year.

      2. If a premium is paid by a registered bank, or a licensed non-bank deposit taker, on behalf of a person to Lloyd’s of London or to some other person, acting on behalf of Lloyd’s of London, not carrying on a business in New Zealand through a fixed establishment in New Zealand,—

      3. the bank or licensed non-bank deposit taker is not an agent of Lloyd’s of London; and
        1. the person who provides the bank or licensed non-bank deposit taker with the funds from which the premium is paid is an agent of Lloyd’s of London.

          Notes
          • Section HD 17B: inserted, on (with effect on 1 April 2017 and applying in relation to a life insurance premium that is derived on or after that date by Lloyd’s of London), by section 120(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).