From 1 January 2018, certain types of general insurance are exempt from duty provided the insured person is a capital gains tax (CGT) small business.
You’re considered a CGT small business entity if you:
The insurer is usually liable to pay the duty which may be passed on to the insured person. If the insured person is a CGT small business, an exemption will apply to
If the insured person is a CGT small business, duty on these types of insurance will not be charged. It is important to note you still may be required to pay duty on other types of insurance contained in your policy.
Once you have determined that you are a CGT small business, you need to provide a declaration to your insurer in an approved form
There is a maximum penalty of $11,000 if false or misleading information is provided to obtain the small business exemption.
Considering the entity and all affiliates and connected entities, all of the following must be true.
A business is affiliated with your business if an individual or company, in relation to their business affairs, acts or could reasonably be expected to act:
Trusts, partnerships and super funds cannot be your affiliates.
An entity is connected with another entity if
This refers to the nature of the entity’s activities, particularly whether the entity is intended to make a profit.
Aggregated turnover is
For more information contact your tax advisor or visit the Australian Taxation Office website.