Examples of Possible Reasons for a Reassessment

Possible cause for reassessment

When a pensioner requests a reassessment of an entity's circumstances s/he must show just cause as to why this should occur. The following outlines a number of circumstances that may warrant a reassessment. However, this is not a definitive list. Each case will need to be examined on its merits.

Some of the circumstances that may warrant a reassessment are:

Gifting to a Private Trust or Company

A gift to a private trust or private company from a sole attributable stakeholder

If a sole [glossary:attributable stakeholder:615], or [glossary:members of a couple:84] who are the only attributable stakeholders, make a capital injection into a structure in the form of a gift, that gift will not be subject to the disposal or [glossary:deprivation provisions:221] but must be included in the value of the structure. This is because a sole attributable stakeholder, or members of a couple who are the only attributable stakeholders, cannot gift to themselves.

Non-Recognised Liabilities of a Controlled Private Company or Trust

Liabilities - loan or debt

Liabilities can include loans that have been made to a trust or [glossary:company:602] or debts owed by a trust or company. Loans can be from controllers, [glossary:associates:491] or a third party. Loans can also have been made by another trust or company or debts can be owed by the [glossary:entity:168] to another trust or company.

Assessable Income from Private Companies pre 01/01/2002

Basis of assessment of income

The assessment of income received by a person from a [glossary:company:602] is based on the type and current rate of [glossary:income:31], if any. Income currently maintained should cease to be assessed, if:

  • the person advises that they are no longer receiving any income, or
  • a company in which a person has an interest is placed in liquidation.

In this case the shareholders effectively no longer have access to the income.

Controlled Private Trust

What is a controlled private trust?

A trust is a [glossary:controlled private trust:86] in relation to an individual if:

  • the trust is a [glossary:designated private trust:703], and
  • the individual passes the private trust [glossary:control test:198], or
  • the individual passes the [glossary:source test:186].

When deciding whether an individual passes the [glossary:control:461] or source tests reference must be had to the [glossary:associates:491] of the individual.