Bonuses From Life Insurance Companies And Friendly Societies
The amount received of any bonuses or other amounts in the nature of bonuses on the maturity, forfeiture, partial or full surrender of a short-term life insurance policy taken out after 7 December 1983. Life insurance policies are issued by life insurance companies and friendly societies. An entity is regarded as having received a bonus if it re-invests or otherwise deals with the bonus during the income year. It does not include the amount shown on a bonus certificate if the reporting entity: - received it because of death, accident, illness or other disability suffered by the person on whose life the policy was effected - received it under a policy held by a superannuation fund or scheme, an approved deposit fund or a pooled superannuation trust - can show that the amount was received because of serious financial difficulties, or - received a bonus certificate in respect of an amount allocated to increase the amount receivable on surrender or maturity. It does not include the amount of any bonus on a policy that has a date of commencement of risk on or before 7 December 1983. If the policy has a date of commencement of risk after 7 December 1983, the full amount of any bonus is included if received during the first eight years after the date of commencement of risk of the policy. Two-thirds of the bonus amount is included if it is received in the ninth year and one-third of the bonus amount if it is received in the 10th year. Amounts received after the 10th year are not included. If, during the term of the policy, the amount of a premium increases by more than 25% over the previous year’s premium, the policy is taken to have started again with a commencement date at the beginning of the policy year in which the premium increased.