(19 March 2010 – Australia) MLC Lifetime, a National Australia Bank subsidiary, has reached an agreement with the Australian Taxation Office (ATO) over the tax treatment of a reinsurance contract entered into by MLC Lifetime in the 1998 tax year and amended in the 2000 tax year.In 2007, the ATO issued an amended assessment to MLC Lifetime claiming approximately A$54 million of primary tax together with interest. The total amount in dispute was A$84 million (pre tax).
In 2009, National Australia Bank paid 50 percent of the amount owing on the assessment, this payment was in compliance with the ATO’s practice of disputed assessments.
The Australian Taxation Office disallowed an objection of the assessment lodged by the NAB Group at the time, prompting the bank to lodge a complaint with the Federal Court.
In a statement released by the bank, NAB said that MLC Lifetime will, on a without admission of liability basis, agree to pay a pre tax amount of A$38.5 million to resolve the dispute in full.