Policy

This section contains information about the assessable income and assets from primary production.

Last amended: 9 October 2006

Non-complying use of capital/income

If the income or capital of the [glossary:special disability trust:293] (SDT) is used for purposes which make it a non-complying trust, then the trust will be assessed under the normal trust and company rules from the date the trust was deemed by a delegate to be non-complying. Any gifts will lose their concessional treatment from the date that the trust becomes non-complying.

Non-compliance events

Events which could result in the trust being non-complying include:

Free accommodation or board and lodging

VEA section 5H(8) (ze)

The value of free accommodation or free board and lodging provided to a person is not income.

If an employer provides written advice that a deduction from wages for the cost of accommodation or board and lodging provided by the employer is being made, the amount deducted is not considered as income. Any amount received after that deduction is treated as income.

Compensation and insurance payments

Last amended: 27 August 2008

Regular earnings

Examples of regular earnings include:

• full-time employment,
• regular part-time employment, and

•    contract work

which is continuing, and which provides a regular and relatively unchanging rate of income.

Last amended: 13 May 2008

Example 1 - Person over 60, no deductible amount in assessment

Jack, a 62 year old [glossary:service pensioner:245], did not notify of the [glossary:deductible amount:468] for his [glossary:income stream:406] prior to 1 July 2007. The income stream commenced prior to 1 July 2007. Because no deductible amount was recorded under the pre 1 July 2007 rules method, Jack is not covered by the saving provision. From 1 July 2007, the new 1 July 2007 rules method will apply.

Method of valuation

While the new rules for trusts and companies have largely replaced methods of valuing shares, an acceptable method is still required where:

This section contains information on the treatment of various types of controlled private trusts such as protective, testamentary and fixed (non-discretionary) trusts from 1 January 2002. It also includes information on trusts that are excluded under Part IIIB, Division 11A of the VEA.

Income from financial investments

Income from [glossary:financial investments:437] including cash, deposits accounts, managed investments, listed securities, loans, unlisted securities, gold, silver, platinum bullion, and asset-tested short term income streams is assessed using the [glossary:deeming provisions:256].    

Effect of a trust on payment

The effect of a trust on a person's payment under the income and assets tests depends on whether they:     

What is a designated private company?

A [glossary:company:602] is a [glossary:designated private company:420] if: