VEA ? [2]
If:
the asset will not be a deprived asset [3] of the person (subject to the percentage of the assets of the structure attributed to the person).
Bill gifts a holiday home worth $150,000 and financial investments of $30,000 to a private family trust on 5 June 2002. Bill is the appointor [3] and trustee [3] of the trust and is attributed with 100% of the assets and income of the trust. The deprivation rules do not apply to Bill as he is the sole attributable stakeholder and he cannot 'gift to himself'. This would also be the case for members of a couple [3] who were the only attributable stakeholders.
Jenny is attributed with 30% of the assets and income of a family trust. On 10 July 2002, Jenny gives $50,000 to the trust. Jenny's deprivation amount is $25,000 (($50,000-30%)-$10,000 (gifting free area)). She serves a five-year deprivation period [3] from the date of the gift.
If a person:
the person will be subject to the deprivation provisions [3] of the Act for the amount they have 'gifted' to the entity. If that person is subsequently attributed with the assets and income of a controlled company or trust, whether wholly or partially, the deprivation period and amount are not changed.
More ? [4]
On 10 February 2002, Richard 'gifts' $50,000 to a controlled private trust. He is subject to a 5-year deprivation period for the amount he has gifted. On 3 June 2002, Richard is attributed with 40% of the assets and income of the trust. Richard's deprivation period or amount does not change as he was not an attributable stakeholder (or did not become an attributable stakeholder) of the trust at the time the transfer of assets occurred.
Individual disposes of assets to company or trust
Section 52ZZW [5] VEA
Individual disposes of ordinary income to company or trust
Section 52ZZZB [5] VEA
An asset means any property, including property outside Australia.
According to section 52ZZJ of the VEA [9], a person is an attributable stakeholder if a company or trust is a controlled private company or trust in relation to the individual unless the Commission determines otherwise.
A deprived asset is an asset:
Most private trusts have a person/s in the position of appointor, who have the power to:
Trustee has two meanings depending on the context, (i) and (ii).
(i) a person who looks after someone else's affairs
According to section 202 of the VEA [9], a trustee is a person appointed by the Commission to administer the financial affairs of a pensioner who may be incapable of managing their own affairs for reasons such as:
These criteria include circumstances where a pensioner has a psychiatric disorder or a mental illness as a result of alcohol or drug addiction.
A trustee can be appointed, with or without the consent of the pensioner and once appointed, a trustee has full control of the pension payment.
(ii) a person responsible for administration of a trust
According to section 52ZO of the VEA [9], trustee has the same meaning as in the Income Tax Assessment Act 1997 [10].
According to Section 5E(2) [11]of the VEA [11]a person is a member of a couple, if they are:
The term “partnered” is also commonly used.
An entity means any of the following:
an individual,
a company,
a trust,
a business partnership,
a corporation sole,
a body politic.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16407%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16407#tgt-cspol_part10_ftn513
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16407#tgt-cspol_part10_ftn514
[5] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[6] https://clik.dva.gov.au/book/export/html/16407#ref-cspol_part10_ftn513
[7] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/96-deprivation-income-and-assets/962-general-provisions-deprivation
[8] https://clik.dva.gov.au/book/export/html/16407#ref-cspol_part10_ftn514
[9] http://clik.dva.gov.au/legislation-library
[10] http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401745?OpenDocument
[11] http://www.comlaw.gov.au/Series/C2004A03268