Private Health Insurance

by with No Comment Private Health Insurance CoverPrivate Health Insurance Rebate (PHI)Private Health Insurers

By the ATO guideline, you may entitled to get private health insurance rebate or tax offset depends on below condition:

  • the age of the oldest person covered by your policy, and
  • your single or family income depending on your family status.

If you hold private health insurance and your income is more than ATO threshold, you can receive less amount of rebates of private health insurance.

ATO will calculate the amount of private health insurance rebates and you will get rebates when you lodged your tax return in the financial year.

You can claim rebate for private health insurance as :

  • premium reduction, which lowers the policy price charged by your insurer
  • refundable tax offset through your tax return.

You can get tax offsets on private health insurance but depends on:

  • how you claim your rebate
  • the level of rebate you have claimed for your policy
  • your income for surcharge purposes.

For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au

Private Health Insurance Covers

by with No Comment Private Health Insurance CoverPrivate Health InsurersTax Topics

Private health insurance general treatment cover (also known as ancillary or extras cover) can offer out-of-hospital services that are generally not funded by Medicare, such as:

  • dental treatment;
  • ambulance;
  • chiropractic treatment;
  • home nursing;
  • podiatry;
  • physiotherapy;
  • occupational therapy;
  • speech therapy; and
  • glasses and contact lenses.

For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au

Demutualisation of insurance companies

by with No Comment Interest ChargesPrivate Health Insurers

If you hold a policy in a life insurance company or a general insurance company that demutualises, you may be subject to capital gains tax (CGT) either at the time of the demutualisation or when you sell your shares (or another CGT event happens).

A company demutualises when it changes its membership interests to shares (for example, AMP, IOOF and NRMA). There are similar rules if you are a member of a non-insurance organisation that demutualises.

The insurance company may give you an option either to keep your share entitlement or to take cash by selling the shares under contract through an entity set up by the company.

If it is an Australian insurance company and you choose to keep the shares, you will not be subject to CGT until you eventually sell them or another CGT event happens. However, if you elect to sell your share entitlement to the company and take cash, you need to include any capital gain on your tax return in the income year in which you entered into the contract to sell the shares, even though you may not receive the cash until a later income year.

The demutualising company will write to all potential ‘shareholders’ and advise them of the acquisition cost in each instance. The acquisition cost is sometimes referred to as the ‘embedded value’. Even though you did not pay anything to acquire the shares, they have a value that is used as the cost base and reduced cost base for CGT purposes.

If you sell your shares before the insurance company is listed on the stock exchange and you make a capital loss, you disregard the loss.

If you hold a policy in an overseas insurance company that demutualises, you may be subject to CGT at the time of the demutualisation. Phone us for advice (on 13 28 61) if this applies to you.

For more information on Etax, Mytax and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au

 

Demutualisation of private health insurers

by with No Comment Private Health InsurersUncategorized

The law relating to the CGT treatment of policy holders of health insurers who receive cash or shares when their health insurer demutualises changed with effect from 1 July 2007.

If you hold or held a policy of a private health insurer that converts from a not-for-profit insurer to a profit insurer by demutualising, you disregard capital gains and losses you make from a CGT event happening to your interest or other right you have or had in the insurer.

If you receive shares or rights to acquire shares as a result of the demutualisation of your private health insurer, you will be taken (for CGT purposes) to have acquired each share or right at the time it is issued. The first element of the cost base or reduced cost base is equal to the market value of that share or right on the day they are issued.

Any sale of the shares or rights will be a CGT event that may give rise to a capital gain or capital loss in the income year in which you enter into the contract of sale. This includes when the shares are sold through the sale facility.

If you receive a cash payment under the demutualisation that is not as a result of the sale of the shares or rights, you will not make a capital gain or loss.

For more information on Etax, Mytax and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au