Exemption For Life Insurance‘Too Low’

Press, Volume CII, Issue 30121, 3 May 1963, Page 12

Exemption For Life Insurance‘Too Low’

(New Zealand Press Association)

AUCKLAND, May 2.

The Auckland Chamber of Commerce believes income tax exemption for life insurance and superannuation is too low.

Mr E. P. Salmon, at a meeting of the council of the chamber today, said the exemption at £250 was particularly low for selfemployed persons such as lawyers, accountants and doctors.

The income of professional men stopped when they retired. During their working lives provision had to be made for old age and for their dependents. They could not build up a business or similar assets. Their principal asset would be an insurance scheme of some kind.

A premium of £250 a year was not enough to provide superannuation maturing at the normal retiring age. An employed person usually did not pay the full contribution to his superannuation fund. The employer usually subsidised the payment. The employee, in effect. was able to provide up to £5OO for retirement, compared with the maximum exemption of £250 for the self-employed person. Mr D S Cox said the low exemption affected all persons who were not members of a superannuation scheme In England, the exemption

allowed was up to £750 or 10 per cent of income, and in Australia it was £4OO. The chairman (Mr G. Hawley), said that before 1960 the exemption was £175 with a further £75 allowed for the self-employed. The margin had been eliminated when the exemption was raised to £250. The council decided to ask the Government through the Associated Chambers, whether it intended to restore the differential for selfemployed persons