tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, March 28th, 10:13PM

Insurance

rss
Latest Headlines

Sovereign faces big bill

Sovereign is liable for $82 million after losing its battle with the Inland Revenue.

Monday, February 3rd 2014, 6:00AM

by Susan Edmunds

It was appealing a 2012 High Court ruling in which it was found that it had not given the right tax treatment to reinsurance arrangements with three reinsurers between 2000 and 2006.

Sovereign said it was reviewing the Court of Appeal ruling that upheld the High Court finding and was considering whether to seek leave to appeal.

Chief executive Symon Brewis-Weston said the decision would not affect the company’s A+ financial strength rating.

At issue is the tax treatment of commission flows in which the reinsurers paid refundable commissions on life insurance policies issued. Sovereign would then repay the commissions plus interest over a number of years.
Sovereign treated the commission as income when it was received and as expenses when they were repaid plus interest.

The High Court ruling said that they should have been deatl with under the accrual rules of the Income Tax Act, and only the interest cost on the principal should have been tax deductible.

« S&P rating 'positive for industry'nib launches new adviser product »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Insurance Briefs

Partners helps fund depression recovery centre
New Whakamātūtū Wellington Depression Recovery Centre gets financial boost from Partners Life.

AIA adds cover for prophylactic surgery following cancer
AIA makes changes to policies and adds preventative surgery for several types of cancer.

Chubb appoints David Morrow as Country President for New Zealand
Chubb has appointed David Morrow as Country President for New Zealand.

nib adds specialist skills to its board
Two new board appointments at health insurer nib add new perspectives, chairman says.

News Bites
Latest Comments
Subscribe Now

Cover Notes - Specific news aimed at risk advisers

Previous News
Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com
x