Last updated: 1 June 2021
This topic provides information on the following:
- assessable asset amount,
- valuing the interest in a partnership,
- verification of asset value, and
- valuation of real estate.
Assessable asset amount
The amount to be taken into account for assets test purposes is the pensioner's interest in the partnership. Interest in the partnership is the amount that the pensioner would receive if the partnership were wound up, and depends on the:
- net value of the partnership assets,
- proportion of the net assets which the pensioner is entitled to receive, and
- net amounts contributed or withdrawn by the individual partners.
Valuing the interest in the partnership
The proprietors' funds in a partnership:
- are calculated using the assets and liabilities shown in the financial accounts, and
- reflect the capital contributions and drawings of each partner.
Note: Each partner's share of the partnership funds are shown in the financial accounts as Proprietors' funds.
Pensioner's share of the proprietors' funds
The pensioner's share of the proprietors' funds is the total of both fixed and current capital accounts in their name, and this can be obtained from the written partnership agreement and/or the latest balance sheet. An initial estimate of the pensioner's interest in the partnership is the amount shown on the balance sheet as:
- their share of the proprietors' funds, and
- any loans they have made to the partnership.
Note: If a balance sheet is not available, a list of all partnership assets and liabilities, including their current values, may be required.
Verification of asset value
The recorded value of fixed assets, other than real estate, can generally be accepted for valuation purposes. Using conventional accounting methods, fixed assets are recorded at historical cost, usually the purchase price less depreciation.
Valuation of real estate
The following table describes the requirements for valuation of real estate.
If... | Then... |
real estate is recorded on the balance sheet, | it must be assessed at its current market value and a valuation by a qualified valuation service provider may be necessary. |
the real estate includes the pensioner's principal home and up to two hectares of adjacent private land, | the assessable value of the real estate is the value of the portion of the principal home and land that is used for commercial purposes. Any land exceeding the two hectares of adjacent land is assessable. A valuation by a qualified valuation service provider may be necessary. |
the real estate includes the pensioner's principal home and all land on the same title
| a valuation by a qualified valuation service provider may be necessary if the property includes titles other than the principal home title. |
the assessable current market value of the real estate differs from the written down value, | the difference is shared between the partners and added to their recorded interests in the partnership. Unless alternative arrangements are specified in the partnership agreement, the surplus or deficit on re-evaluation is allocated in the proportions in which each partner shares in the partnership. |