Deeming applies to managed investments [2] held overseas.
Deeming applies to funeral bonds that are not exempt assets [2].
More → [3]
The following table describes the application of deeming to private unit trusts:
More → [4]
If the private unit trust is... | then it is... |
a managed investment | subject to deeming. |
not a managed investment, because it does not meet all of the criteria for a managed investment. For example, if an investor in a private unit trust exercises control over the management of the invested assets then it is not a managed investment. |
|
The following table describes the application of deeming to ostrich and emu farming investments.
More → [5]
Investment Type | Application of Deeming |
Speculative | Investments of this type are not financial investments [2] and therefore, not subject to deeming. For assessment purposes:
|
Share farming scheme | Share farming investments are considered to be businesses, therefore assessment is made of gross income from the business, less allowable deductions. An arrangement is subject to deeming if it is established that the:
|
Managed investment scheme | These schemes are managed investments and are subject to deeming. |
The following table describes the application of deeming to afforestation projects:
More → [6]
If the investor is... | Then... |
Carrying on a business alone or with other participants, with a direct investment in an identifiable area of land and associated commodities | assessment is made of gross income from the business, less allowable deductions. |
Not carrying on a business | the arrangement must be examined to establish whether it is a managed investment. NOTE: While forestry investments may be marketed as being managed investments, and may be assessed as managed investments for taxation purposes by the ATO, they have been found in the past to not satisfy the VEA requirements. Careful examination of the prospectus is required because if the investment remains in the name of the individual investor, with the investor being able to exercise a degree of effective control over the management of the invested asset, the investment is not considered a managed investment. Managed investments are subject to deeming. |
Asset-tested lifetime income streams purchased on or after 1 July 2019 which were purchased with non-superannuation monies, are considered managed investments and deemed before the assessment day [7] (prior to payments commencing or the owner reaching pension age). After the assessment day, they are no longer considered managed investments and other rules apply, see 10.5.4 Means Test Assessment of Lifetime Income Streams and Glossary term 'Assessment Day'.
What constitutes the different types of ostrich and emu farming investments
9.5.6/Description - Other Managed Investments [10]
An investment is a managed investment if:
For a full definition see also:
Sections 5J(1A), 5J(1B) and 5J(1C) of the VEA [14].
An exempt asset is one that is disregarded when calculating the value of a person's assets [2] under the assets test [2]. Examples of exempt assets include:
For a full legislative definition see section 52 of the VEA.
In 1990 the government introduced legislative changes called “deeming” to simplify the assessment of cash deposits and income from certain investments. These changes were made:
Deemed income is the minimum rate that the government expects income support pensioners to earn from investments.
Banks created “pensioner accounts” which paid interest at the deeming rate set by the government.
On 1 July 1996 further changes meant the deeming rate was applied to all financial assets as defined in section 5J(1) of the VEA [15].
According to section 5H of the VEA [16] income is:
According to section 5J of the VEA, a financial investment means:
but does not include an investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008) or a designated NDIS amount.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16123%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16123#tgt-cspol_part9_ftn518
[4] https://clik.dva.gov.au/book/export/html/16123#tgt-cspol_part9_ftn519
[5] https://clik.dva.gov.au/book/export/html/16123#tgt-cspol_part9_ftn520
[6] https://clik.dva.gov.au/book/export/html/16123#tgt-cspol_part9_ftn521
[7] https://clik.dva.gov.au/glossary/assessment-day
[8] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1023-disregarded-assets/disregarded-assets-relating-deceased-estates-and-funeral-expenses
[9] https://clik.dva.gov.au/book/export/html/16123#ref-cspol_part9_ftn518
[10] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/956-deeming-managed-investments/description-other-managed-investments
[11] https://clik.dva.gov.au/book/export/html/16123#ref-cspol_part9_ftn519
[12] https://clik.dva.gov.au/book/export/html/16123#ref-cspol_part9_ftn520
[13] https://clik.dva.gov.au/book/export/html/16123#ref-cspol_part9_ftn521
[14] http://www.comlaw.gov.au/Series/C2004A03268
[15] http://clik.dva.gov.au/legislation-library
[16] http://clik/health-procedure-library/health-information-and-management-notes-himn/vhc/072014-vhc-veterans-home-care