What is classed as general insurance for stamp duty purpose?

General insurance is not defined in the Act, but is any insurance that is not life insurance (and includes personal accident insurance).  A “general insurer” means an insurer who carries on insurance business in respect of insurance that is not life insurance.

When must the Statement be lodged?

A General Insurer is required to lodge a monthly Statement providing details of all general insurance premiums in the previous calendar month and pay stamp duty at the rate of 11% of premium subject to duty.

Calculate stamp duty on general insurance.

The Statement and duty payable is required to be lodged with RevenueSA by the 15th day of the following month - for example, the July Statement must be lodged by 15 August. The Statement is lodged on RevenueSA Online by an authorised user.

If no stamp duty is payable, a 'Nil; Statement still must be completed and lodged.  Lodging a 'Nil' Statement will avoid the Commissioner issuing an estimated assessment, inclusive of interest and penalty tax.

Interest and penalty tax are charged on the late lodgement / payment or non-lodgement of a Statement (refer to Ruling TAA001 for further information). A maximum penalty of $10,000 may apply for a failure or refusal to lodge a Statement.

What premiums are subject to stamp duty?

Premiums subject to stamp duty are:

  • premium received in the previous calendar month;
  • premium credited to an account of the insurer (but not received by the insurer) in the previous calendar month that the insurer chooses to include; and
  • premium credited to account more than 12 months ago, that has not been received, and has not been included in a Statement in that preceding 12 months (as long as the policy has not been cancelled on the basis of not coming into legal effect),

with any exemption, allowable deduction and refund to then be taken into account.

“Premium” means an amount paid or payable for insurance and includes:

  • an amount charged to a policy holder to reimburse, offset or defray the insurer's liability for GST in respect of the insurance; and
  • a levy charged to a policy holder; and
  • an instalment of premium; and
  • a part of a premium.

Premium for the above purposes is:

  • premium that is not for life insurance;
  • premium for a rider attached to a life policy that is not a contingency that is dependent on the duration of human life of the insured (for example, income protection insurance attached to a life policy);
  • premium for a rider attached to a life policy that is insurance in respect of trauma or a disabling or incapacitating injury, sickness, condition or disease; and
  • premium for personal accident insurance attached to a life policy where the principal place of residence of the insured was in South Australia at the time the policy providing the insurance was issued.

Premium for the above purposes excludes:

  • premium received in the month that the insurer chose to include in a previous Statement as premium credited to an account of the insurer at that time but not received by the insurer at that time;
  • personal accident insurance attached to a life policy where the principal place of residence of the insured was not in South Australia at the time the policy providing the insurance was issued; and
  • premium for an insurance risk outside South Australia (with the exception that premium for personal accident insurance (for a risk outside South Australia) attached to a life policy where the principal place of residence of the insured was in South Australia at the time the policy providing the insurance was issued cannot be excluded).

Further, premium for the above purposes also excludes any stamp duty the insurer may have received from a policy holder when payment for the policy was made.

Premium for an insurance risk that is outside of South Australia (except for personal accident insurance as mentioned above) should be returned to the State Revenue Office of the Australian jurisdiction in which the risk is located.  If the risk is partly in South Australia and partly in another jurisdiction, a General Insurance Apportionment Schedule is available to assist with apportionment of the risk across jurisdictions.

What premiums are exempt from stamp duty?

Premium exempt from duty is:

  • A premium received or charged in respect of reinsurance.

Note: an insurer that takes on the initial risk can no longer claim an exemption where a risk (or a portion of that risk) is reinsured, and therefore must include that premium as premium subject to duty (unless an exemption or deduction were to apply). If the reinsurer is registered within South Australia, the reinsurer can now claim the reinsured risk as exempt premium.

  • A premium received or charged under a private guarantee fidelity insurance scheme promoted amongst and sustained solely for the benefit of the officers and servants of a particular public department, company, person or firm and not extended, either directly or indirectly, beyond such officers and servants;

and

A premium received or charged under a private guarantee insurance scheme promoted amongst and sustained solely for the benefit of the officers and members of a friendly society or branch thereof and not extended, either directly or indirectly, beyond such officers and members.

  • A premium received or charged under a policy or workers compensation insurance where the premium or portion is referable to insurance against liability to pay workers compensation in respect of workers under the age of 25 years.
  • A premium received or charged under a policy of insurance by a body registered under Part 4-3 of the Private Health Insurance Act 2007 of the Commonwealth where the premium is referable to insurance against medical, dental or hospital expenses.
  • A premium received or charged in respect of the insurance of the hull of a marine craft used primarily for commercial purposes or in respect of the insurance of goods carried by railway, road, air or sea or of the freight on such goods.
  • A premium received or charged in respect of insurance covering the total or partial loss of crops resulting from drought, whether or not this insurance also covers loss resulting from other perils (multi-peril crop insurance). If the policy does not include drought the premium will not be exempt. The exemption can only be claimed on new policies or renewals with an inception date of 1 January 2018 or later.

Does GST form part of the premium subject to duty?

Stamp duty is calculated on the GST inclusive value of a premium.

Find out more about the GST provisions in Information Circular No. 22.

What happens when the premium has been refunded/policy is cancelled?

A deduction can be claimed for premium credited to an account of an insurer but not received by the insurer at the time the policy is cancelled, where stamp duty has previously been paid on a premium, or where the premium is included as ‘gross’ premium in the Statement of the same month.

Where the deduction exceeds the net premium, duty on the exceeded amount is taken to be an overpayment of tax pursuant to Section 41 of the Act and the Statement is treated as an application for refund pursuant to Part 4 of the Taxation Administration Act 1996.

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