Examples of Possible Reasons for a Reassessment

Possible cause for reassessment

When a pensioner requests a reassessment of an entity's circumstances s/he must show just cause as to why this should occur. The following outlines a number of circumstances that may warrant a reassessment. However, this is not a definitive list. Each case will need to be examined on its merits.

Some of the circumstances that may warrant a reassessment are:

• a change in business operations conducted by the entity (see example 1),
• a change in the circumstances affecting a business operating in the industry or in the same geographical location (see example 2),
• a change to government regulations, policy or taxes which affect the business,
• a change in the overall economic climate,
• cessation of the business,
• commencement of a new business,
• business activities are not currently being conducted due to illness,
• amended Tax Assessment Notice, or
• withdrawal from a business.

Example 1

Example 1 could include:

• completion or expiry of a contract,
• loss of a contract,
• a major restructure of the business,
• sale of a business or part of the business operations,
• restructure of the financial position of the business,
• refinance or extension of the business liabilities.

Example 2

Example 2 could include:

• natural disasters e.g. drought, flood,
• significant change in commodity prices e.g. wool sales,
• significant change in the price of raw materials, stock or other imports utilised by the business e.g. minerals.

Example of reassessment due to business downturn

Pensioner A is the sole attributable stakeholder of a private company. He has been on an annual assessment cycle for 2 years but has requested a reassessment of his circumstances due to a severe downturn in business turnover. He provides all relevant documentation and the staff member decides to put Pensioner A on a 3 monthly reassessment cycle. Pensioners A's attribution period becomes the period of reassessment (3 months) and his derivation period is the current tax year.