Issue
Are specified management fees of a life insurance company which are exempt from tax under section 320-40 of the Income Tax Assessment Act 1997 (ITAA 1997) excluded exempt income for the purposes of subsection 36-20(3) of the ITAA 1997?
Decision
No, specified management fees of a life insurance company which are exempt from tax under section 320-40 of the ITAA 1997 are not excluded exempt income for the purposes of subsection 36-20(3) of the ITAA 1997.
Facts
Section 320-40 of the ITAA 1997 provides for the exemption of one third of certain management fees received by life insurance companies under contracts made before 1 July 2000.
Reasons for Decision
Subsection 36-20(3) of the ITAA 1997 includes as excluded exempt income amounts of exempt income to which specific provisions of the Income Tax Assessment Act 1936 (ITAA 1936) apply. Subsection 36-20(3) of the ITAA 1997 does not list exempt income under section 320-40 of the ITAA 1997 as excluded exempt income. ( Note: this issue has been referred to Government)