Assessment of assets
The following table describes how the assets from a non-discretionary trust are assessed.
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If a person is... |
Then they... |
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a co-beneficiary of the assets of a non-discretionary trust |
have an asset. The value of the asset is determined by the share of the trust held by each beneficiary, as set out in the trust deed. Example: If a person is one of 5 beneficiaries of a trust that has $100,000 in assets and the terms of the trust provide that the beneficiaries have an equal interest, then the value of each beneficiary's interest is $20,000. |
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the sole beneficiary of the assets of a non-discretionary trust |
have the beneficial ownership of the trust's assets which are considered to be theirs, unless the assets are exempt. |
Description of asset assessment for different roles within trusts
The following table describes the roles of individuals within the trust and the treatment of their trust related assets. A person may have more than one role and each needs to be considered separately.
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Role |
Description |
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Settlor |
Is not usually entitled to a share of the trust assets, but deprivation of assets provisions may apply for gifts to the trust. |
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Contributor |
Loans made to the trust are assessable assets, and deprivation of assets may apply for gifts to the trust. Deeming applies to the balances of outstanding loans to the trust. |
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Beneficiary |
Assessment is based on the total asset value divided by the person's share of ownership, as specified in the trust deed. |
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Is not entitled to a share of the trust assets unless they are also a beneficiary, although asset(s) may be registered in their name. |
Summary table of assessable assets
The following table summarises the assessment of assets from non-discretionary trusts, for pensions.
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Type of Asset |
Description |
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Interest on the trust's assets |
Assess using the amount or proportion set out in the trust deed. |
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Beneficiary account |
Assess as a financial asset of the person. The money is put in the account by the trust usually as reinvested trust distributions or interest. These may be called beneficiary loan accounts, current accounts or beneficiary current accounts. |
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Loan to a trust |
Assess as a financial asset of the person. The person has loaned the money to the trust. These may also be called beneficiary loan accounts or loans. |
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Gifting to a non-discretionary trust by a beneficiary or unit holder |
The amount of the deprivation is the difference between the value of the asset(s) gifted and any resulting increase in the value of the person's interest in the trust's assets, less the allowable gifting amount. More →
Deprivation of Income and Assets |
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Assets gifted to a trust |
Maintain the amount that was disposed of as a deprived asset for 5 years from the date of disposal, less the allowable gifting limit. |
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Managed investments and shares sold/transferred to the trust |
Deprivation provisions may apply if adequate financial consideration is not received. |