Both NIB and MBF are well advanced in their plans to demutualise and list on the ASX and the Government has confirmed its intention to sell Medicare Private in 2008.
To facilitate these changes, the
Treasurer has announced that the Government intends to amend the
income tax laws to provide capital gains tax (CGT) certainty for
policyholders of health insurers who receive shares as part of their
health insurer’s demutualisation.
These changes will ensure
that policyholders, including policyholders holding a beneficial
membership interest via a trust, who give up any rights they may have
in their health insurer in exchange for shares will not be subject to a
CGT taxing point at the time of the exchange and will provide
consistency between the income tax laws and the requirements of the Private Health Insurance Act 2007.
In addition, the Government will make changes to provide relief from
CGT for transactions that relate to the mechanism that allows
policyholders to receive shares.
The Government will also
provide a legislative framework for issued shares to be held on trust
for ‘lost’ policyholders, who, for example, are unable to receive
shares because they reside overseas or have not agreed to receive their
shares. Broadly, the Government intends to facilitate the issue of
shares to the trustee, the transfer of shares from the trustee to
policyholders and the cancellation of any remaining shares in the trust
after a certain period of time without adverse or advantageous CGT
consequences to either the trustee or the policyholder. It is the
Government’s intention that the trustee will otherwise be subject to
the existing income tax rules.
The Government proposes that
post‑CGT policyholders receive a cost base for their shares that is
based on their share of their health insurer’s net tangible assets and
that pre‑CGT policyholders receive a market value cost base. The
Government also intends to provide a similar ‘net tangible assets’
based cost base for any rights that post‑CGT policyholders surrender
for a cash payment, rather than shares, as part of their health
insurer’s demutualisation.
These changes will apply from 1 July 2007.
UPDATE 7 November: NIB successfully lists on ASX
UPDATE 25 December 2007: new government will not privatise Medibank Private
MBF Board recommends BUPA merger offer
