Excluded exempt income - ordinary and statutory income derived from segregated exempt assets

Are amounts of ordinary income and statutory income derived from segregated exempt assets of a life company which are exempt from tax under paragraph 320-35(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) excluded exempt income for the purposes of subsection 36-20(3) of the ITAA 1997?

No, amounts of ordinary income and statutory income derived from segregated exempt assets of a life insurance company and which are exempt from tax under paragraph 320-35(1)(b) of the ITAA 1997 are not excluded exempt income for the purposes of subsection 36-20(3) of the ITAA 1997.

A life insurance company derives ordinary and statutory income from segregated exempt assets which is exempt from tax under paragraph 320-35(1)(b) of the ITAA 1997.

Subsection 36-20(3) of the ITAA 1997 defines excluded exempt income to include amounts exempted under a number of specific provisions of the Income Tax Assessment Act 1936 (ITAA 1936). Subsection 36-20(3) of the ITAA 1997 does not specify that the amount which is exempt under paragraph 320-35(1)(b) of the ITAA 1997 is excluded exempt income. Note: this issue has been referred to Government.