Life insurance duty has been abolished from 1 July 2014

Duty is payable on the premiums paid in respect of life insurance policies.

Life insurance is any insurance or assurance in respect of:

  • A life or lives, or
  • An event or contingency relating to or depending on a life or lives

of a person who resides in Victoria at the time the insurance policy is issued.

Life insurers

A life insurer is a person or entity that:

  • Writes life insurance,
  • Does so otherwise than as an insurance intermediary (for example brokers), and
  • Is authorised under the Life Insurance Act 1995 (Commonwealth) to carry on insurance business

Only entities authorised under the Life Insurance Act can sell life insurance policies. A life insurer must make out and execute a policy of life insurance within three months of receiving or taking credit for a premium for a life insurance policy, and must ensure the policy is duly stamped.

Life insurers must be registered under Chapter 8, Part 3 of the Duties Act and this can be done by completing a registration application form.

Paying life insurance

The life insurer is liable to pay the duty, although the cost may be passed on to the insured.

The life insurer must lodge a return with us in respect of life insurance policies issued in the preceding month, and pay the appropriate duty, on or before the 14th day of each month.

Penalties for late lodgement or payment

Returns and payments are to be lodged by the due date as penalty and interest apply for non-lodgement or late payment.

Amounts of duty payable

The amount chargeable on a policy of life insurance, other than a temporary or term insurance policy, depends on the sum insured:

  • If it does not exceed $200 (nil),
  • If it exceeds $200 but not $2000 (12 cents per $200 or part thereof), and
  • If it exceeds $2000 ($1.20 plus 24 cents per $200 or part thereof, of the sum insured exceeding $2000)

The duty for temporary or term insurance policies is 5 per cent of the first year's premium on the policy.

Impact of GST

Life insurance is not a taxable supply for GST purposes, therefore GST is not a consideration in relation to duty on life insurance.

Exemptions

No duty is chargeable for a policy of reinsurance, or on a cover note if a stamped policy is issued within three months after the issue of the cover note.

Change of details

After registration, if you change your legal entity, trading name or address, please change your contact details to notify us as soon as possible.