Policyholders receive CGT exemption
Chris Bowen
The Government has announced plans to provide capital gains tax relief for policyholders of health insurers who receive shares when their health insurer demutualises.
Assistant Treasurer Chris Bowen said this will create certainty for policyholders of health insurers that have recently or will shortly demutualise and ensure policyholders who receive shares will not be subject to a CGT taxing point at the time they receive the shares.
“The Government also intends to provide relief from CGT for transactions that relate to the mechanism that allows policyholders to receive shares.”
A legislative framework will also be put in place that will see issued shares are held on trust for ‘lost policyholders’, who, for example, are unable to receive shares because they’re overseas.
Bowen said policyholders would also be provided with a cost base for their shares that is based on their share of their health insurer’s net tangible assets.
“Pre-CGT policyholders will receive a market value cost base. A similar ‘net tangible assets’ based cost base will also be provided for any rights that post-CGT policyholders surrender for a cash payment, rather than shares, as part of their health insurer’s demutualisation.”
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