Disposal of the Assets of a Private Trust or Company on or after 1 January 2002

Disposal of the assets of an entity by an attributable stakeholder on or after 1 January 2002

If an attributable stakeholder disposes of the assets of a private trust or private company on or after 1 January 2002, and they do not receive adequate financial consideration for those assets, the deprivation provisions are to apply, subject to the attribution percentage of the attributable stakeholder.    

Example 1 of disposal entity assets by attributable stakeholder/s on or after 1 January 2002

Colin is the sole attributable stakeholder of a private family trust with assets of $300,000. On 2 April 2002 he resigns from the trust. Colin's daughter and son become the new attributable stakeholders. Colin is subject to the deprivation provisions of the VEA for the assets he has 'gifted' to his children ($300,000).

Example 2 of disposal entity assets by attributable stakeholder/s on or after 1 January 2002

Denise and Barbara are attributable stakeholders of a private company. Denise is attributed with 70% and Barbara with 30% of the assets and income of the company. The company's assets are valued at $500,000. Denise and Barbara decide to sell an asset of the company to Denise's daughter. The asset is valued at $100,000, but they sell it for $25,000. Denise and Barbara are subject to deprivation for the difference between the market value and the sale value of the asset ($75,000). Their individual deprivation amounts are subject to their attribution percentages. Denise's deprivation amount is $42,500 ($75,000 x 70% less $10,000 (gifting free area)). Barbara's deprivation amount is $12,500 ($75,000 x 30% less $10,000 (gifting free area)).