Taxation Implications:

Taxation Implications of Policy Ownership

Income Tax

Capital Gains Tax


CGT Exemptions:

CGT Exemptions for Insurance

2015 Amendments

Death Benefits

Non-Death Benefits

Terminal Illness


Methods of Policy Ownership:

Ownership Implications

Cross Ownership

Self Ownership

Trust Ownership

Super Buy/Sell


Buy/Sell Cover:

Implications for Buy/Sell Cover

Cross Ownership

Self Ownership

Related Party Vendors

Deemed Dividends

Risks If No Agreement

Trust Ownership

Super Buy/Sell

Origins of Self-Ownership


Debt Reduction Cover:

Implications for Debt Reduction Cover

Cross Ownership

Self Ownership

Trust Ownership

Bank Ownership


Third Party Payments:

Implications for Promises to Distribute Insurance Proceeds to Third Parties


Commercial Debt Forgiveness:

Commercial Debt Forgiveness

Cross Ownership

Self Ownership

Trust Ownership


Super Fund Ownership:

Super Fund Ownership

Tax Disadvantages

Cost Disadvantages

Other Disadvantages

Geared Premium Funding


Aggregation onto One Policy:

Methods of Aggregation









Trust Ownership of Buy/Sell Cover


The IGS form of Trust Ownership means that a Trustee owns the Policy on behalf of the Life Insured.



Click here to see a diagram that illustrates the Trust Ownership of Buy/Sell Cover and Debt Reduction Cover.


CGT Exemptions for Death and Non-Death Benefits

Because the Life Insured is the "beneficial owner" of the Policy under the "roof" of the Trust, Trust Ownership obtains a CGT exemption for both Death and Non-Death Benefits.


Payment to Appropriate Vendor

One of the advantages of Trust Ownership is that it can pay the Purchase Price to the correct Vendor in cases where the Owner of the Equity is not the Life Insured.

In other words, the Life Insured (in its capacity as "beneficial owner") can direct the Trustee to pay the insurance proceeds to the appropriate Recipient.

In contrast, Self-Ownership must pay the Purchase Price to the Life Insured or their Estate.

This might not be appropriate from a commercial or family point of view if the owner of the Equity is not the Life Insured.

For example, the owner of the Equity might be a Company, Family Trust or other family member (who should be entitled to receive the Purchase Price of their Equity).

Third Party Recipients

The Business Insurance Trust Agreement can distribute the Insurance Proceeds directly to Third Parties both securely and tax-effectively.

The ATO Ruling with respect to the IGS Business Insurance Trust Agreement states that:

"the payment of an amount by the trustee to a nominated recipient in accordance with a nominated beneficiary's direction, will not be the discharge or satisfaction of an asset under CGT event C2."


Trust Ownership Agreements

Please click here to read about Trust Ownership Agreements.



Copyright: Ian Gray Solicitor



Adviser Tip

Trust ownership is an indirect form of self-ownership.

The Life Insured is the "beneficial owner" for legal and tax purposes under the roof of the Trust.

See more Adviser Tips


Current Marketing Schedule

Current Marketing Schedule

Ian Gray travels to most capital cities regularly throughout the year and is available for Meetings.

Please click here to see his availability in Brisbane, Sydney, Melbourne, Adelaide and Perth.

Please contact us to arrange an appointment or teleconference.