Demutualisation of MBF

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(Source: ATO)

In May 2008, MBF and BUPA Australia Group implemented a scheme to merge their businesses. As part of that scheme, MBF undertook a demutualisation which entitled its policy holders to a cash payment for the disposal of certain membership rights.

MBF sent the payment to policy holders for the disposal of their membership rights in MBF on 30 June 2008.

After the demutualisation took place, a change was made to the law relating to the capital gains tax (CGT) treatment of policy holders of health insurers who receive cash or shares when their health insurer demutualises.

The changes are contained in Tax Laws Amendment (2008 Measures No. 4) Act 2008.
Under the new law, policy holders disregard any capital gains and losses that arise when a private health insurer demutualises.

The changes to the law take effect from 1 July 2007, and apply to the demutualisation of MBF.

Your cash payment from MBF is not subject to income tax and you do not have to declare any amount in your 2007–08 tax return in respect of the payment.

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