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Forms of Income from Share Investments

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The following table describes the consequences of the deeming of income from share investments. The basic principle is that actual returns from shares in any form in the following table are not assessed as income because deemed income is assessed from the types of share investments listed in:

Form of income or return

Impact on assessment

Obligation to notify DVA

Dividends

None

None

Capital gains and losses

Capital:

  • Gains are not assessed as income.
  • Losses cannot be offset against other assessable income

None

Share Restructures (i.e. share splits and consolidations or bonus shares)

Not assessed as income but they do increase or reduce the number of shares held, and this affects both the assets test and deemed income.

None

(DVA automatically monitors and updates share restructures each fortnight).

Dividend reinvestment schemes

Only the additional shares purchased will affect the income and assets tests.

Pensioner must notify upon purchase of additional shares.    

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Recipient obligations

Chapter 12.1

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Return of capital

Any return of capital in the form of a cash payment is not assessed, however if that payment is invested as a financial asset, it will have an impact on the income and assets test.

Pensioner must notify if payment is reinvested as a financial asset    

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Recipient obligations

Chapter 12.1

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Company employee share plans or schemes

Shares from company employee plans or schemes are not subject to deeming until the shareholder becomes the legal owner by paying for the shares in full.

Pensioner must notify once shares are paid for in full    

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Recipient obligations

Chapter 12.1

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An employee is someone who is:

  •       under a contract OF service to an employer, and
  •       a salary or wage earner, and
  •       subject to PAYE tax deductions.