Crop and livestock insurance

From 1 January 2018 crop and livestock insurance (Type C general insurance) will be exempt from duty.

The only thing that has changed in relation to crop and livestock insurance is the rate of duty, which has gone from 2.5% to 0%. The definitions of crop and livestock insurance have not changed.

As many policies which contain crop and livestock insurance cover multiple risks with differing rates of duty, insurers will still need to apportion premiums between the risks covered in a policy.

For more information, see the frequent questions below.

Frequent questions

I have a policy that takes effect in December 2017 but the premium is not due until January 2018. Is this policy liable to duty?

Yes, as the policy is effected prior to 1 January 2018 it will remain liable for duty. It does not matter when the premium is paid.

What if I took out crop or livestock insurance before 1 January 2018, can I receive a refund?

No. The exemption only applies to insurance policies effected or renewed on or after 1 January 2018.

What if the premium is being paid in instalments?

If a policy is effected or renewed before 1 January 2018 it will remain liable for duty. It does not matter if the premium is paid before or after 1 January 2018 or if the premium is paid in instalments.

What if I am asked to pay duty on a policy effected on or after 1 January 2018?

If the policy covers crop and/or livestock insurance as well as other risks, then the premium will require apportionment between the different types of risks to determine the duty payable on the part of the premium that relates to the other risks.

Similarly, if the policy applies across multiple States or Territories then the premium will require apportionment in order to calculate any duty payable for each State or Territory.

If you are unsure why you are being asked to pay duty or what risks are covered under your policy, you should discuss this with your insurer.

Do the exemptions for crop and livestock insurance apply to cover under commercial or property business lines as well as to cover under agricultural business lines?

It doesn’t matter whether it’s a property, commercial or agricultural line, or whether it’s a group or a blanket policy.  If any cover falls within the definitions of crop or livestock insurance, then that portion of the policy will be exempt from duty.

Does the exemption for crop insurance include theft?

No. The definition of crop insurance has not changed.

Crop insurance is insurance covering loss due to the destruction of, or physical damage to, any pasturage or any crop of grain, fruit, vegetables or other plants, where the destruction or damage occurs while the pasturage or crop is being grown. Crop insurance also includes loss due to the destruction of, or physical damage to the product of the pasturage or crop while it is being stored or transported, provided the insurance covers the pasturage or crop while it is being grown.

The definition does not extend to loss due to theft. However, a general exemption applies to insurance of goods carried by land, sea or air. In certain circumstances this exemption may cover loss by theft of the product of the pasturage or crop while it is being transported.

Last updated: 6 December 2017