Total and permanent disability (TPD) insurance

Ownership/Purpose	Tax treatment
Ownership/Purpose	Premiums	Benefits
Individual for personal purposes – premiums paid by individual	Non-deductible	Generally a capital payment – CGT exempt if paid to insured or their relative
Individual for personal purposes – premiums paid by employer	FBT may apply – premium and FBT (if any) are generally deductible to employer	Generally a capital payment – CGT exempt if paid to insured or their relative
Trustee of super fund to provide benefits for insured member3	Deductible to extent insured events align with tax law definition of disability superannuation benefit	Payment to fund: generally a capital payment – CGT exempt Payment from fund: subject to a condition of release being met taxed as lump sum benefit or income stream
Trustee of super fund for other purposes eg liquidity/debt repayment3	Non-deductible	Payment to fund: generally a capital payment – CGT exempt There may be further tax consequences depending on use of payment within the fund
Business entity for revenue purposes eg key person revenue cover	Deductible	Generally ordinary income of business entity
Business entity or individual for capital purposes eg buy/sell agreements	Non-deductible	Generally a capital payment – may be subject to CGT if not paid to insured or their relative

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