Reassessment of a Controlled Private Trust or Company

Reassessment request

Generally the assets and income of a controlled private trust or controlled private company are assessed on an annual basis from the most recent tax return. However, pensioners who are attributable stakeholders of a controlled private trust or controlled private company may request a reassessment of their circumstances at any time. The reassessment period then becomes the attribution period, which must have reference to the applicable derivation period.    

Effect on pension of a request for reassessment involving multiple stakeholders

An entity has three attributable stakeholders, X, Y and Z. All the stakeholders are in receipt of an income support payment. Stakeholder X requests a reassessment that results in a decrease in the amount of attributed income for the entity. The decrease in entity income affects all the stakeholders regardless of who originally requested the reassessment.

Documentation — pensioner requirements

The pensioner must supply appropriate documentation to enable a reassessment. It is their responsibility to keep current financial records of the entities they control. The documentation they may supply can include but is not restricted to:

• year to date financial statements (year to date means current financial year),
• previous years' tax returns, if it will help to establish a trend or assist in quantifying the impact of a change in circumstances,
• estimate of expected earnings for the reassessment period,
• documentary evidence of the event that has occurred that has lead to their reassessment request.

The pensioner is also required to supply current financial records at the end of each reassessment cycle. Where a person has difficulty in providing this information, it is appropriate that they seek assistance from their accountant. It should be noted that possible legal ramifications preclude DVA staff from assisting pensioners in compiling the financial statements.

Estimate of expected earnings

The pensioner must supply an estimate of their expected earnings for the reassessment period.

• this estimate is to be used in the calculation of entitlements, and
• at the end of each cycle the estimate will be reviewed and, if required, a new estimate struck.