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Summary of Assessable Assets of Partnerships Only
VEA ?
This topic provides a summary of assessable assets for pensions that relate to partnerships only.
Summary table - assessable assets for pensions
The following table summarises the assessable assets, and their treatment, from a partnership's business for pensioners.
Asset |
Treatment |
Business assets |
|
Loans to the business by a partner |
|
Loans to the business by persons other than a partner |
|
Loans by the business to a partner |
Include them as assets when calculating the overall value of the business, but deduct the pensioner's loan from the assessable value of the interest in the business. |
Loans by the business to persons other than the owner |
Assess them as the personal financial investments of the partners in the proportion to which they share these assets. |
Non-partnership assessable assets providing security for business liabilities where the business has a net deficiency |
Deduct the pensioner's share of the amount of the deficiency from the value of the assessable assets providing security. |
Value if the pensioner's share of interest in the partnership is a deficiency, but their spouse's interest in the same partnership has an assessable value |
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An asset means any property, including property outside Australia.
For the purposes of income and assets assessment, a partnership is the relationship which exists between people carrying on business in common, with a view to making a profit. A partnership agreement may be oral OR written. The business may be run:
- in the owners' name(s), or
- under a registered business name.
The business is not a separate legal entity, which means that although the partnership lodges a tax return, the profit or income is assessable in the hands of the individual partners.
Each partner:
- owns an agreed portion of the business assets,
- receives an agreed portion of the profits, and
- is 'jointly and severally' liable for all business debts.
Profit, for a business, is the amount of earnings in excess of its expenses over 12 months.
According to Section 5E(2) of the VEA a person is a member of a couple, if they are:
- legally married to another person and is not living separately and apart from the other person on a permanent basis; or
- living in a prescribed registered relationship with the other person (whether of the same sex or a different sex) and is not living separately and apart from that other person on a permanent basis; or
- all of the following conditions are met:
- living with another person, whether of the same sex or a different sex;
- not legally married to that person;
- in a de facto relationship with that person; and
- not in a prohibited relationship
The term “partnered” is also commonly used.