No Capital Gains Tax
The Age
Wednesday February 27, 2008
THE Federal Government has pledged that policyholders of health insurance funds will not have to pay capital gains tax when their funds demutualise, although they will when they subsequently sell their new shares.
In a ruling made retrospective to July 1 - so it will apply to the demutualisation of Newcastle-based insurer NIB Holdings - Assistant Treasurer Chris Bowen said yesterday the demutualisation process would not involve any payment of capital gains tax. Instead, policyholders in a demutualised health fund would be provided with a cost base for their shares, to be used whenever they sell their shares, Mr Bowen said. The figure will be based on their share of the insurer's net tangible assets.MBF scrapped its demutualisation plan last year in favour of a $2.4 billion merger with rival insurer BUPA Australia, leaving NIB as the only listed company that is simply a health insurer.Mr Bowen said details would be spelt out shortly in a discussion paper, followed by legislation. -- TIM COLEBATCH
© 2008 The Age