VEA ? [2]
Control [3] of the assets [3] and income [3] of a designated private trust [3] or a designated private company [3] may be established by looking at the level of informal control that individuals or members of a couple [3] hold through their associates [3]. An associate is a person(s) or entity(s) who could be expected to act in accordance with the individual's or couple's wishes.
Associates of an individual may include:
The fact that a person is identified as an associate does not mean that they would automatically be attributed with the assets or income of the entity. If a person was not the source of the structure's funds, or in control [3] of the structure, and had never received any benefit from the structure, they would not be attributed with control. If a person can show that a genuine gift or a genuine loan has been made to a private trust or private company, the associates rule will not apply. Nor will the associates rule apply if a person genuinely resigns their involvement in a controlled private trust or private company.
More ? [4]
10.3.10/Non-recognised Liabilities of a Controlled Private Company or Trust [7]
10.3.10/Recognised Liabilities of a Controlled Private Company or Trust [8]
10.3.11/Gifting to a Private Trust or Company [9]
10.3.14/Resignation from a Controlled Private Trust or Company on or after 1 January 2002 [10]
Control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights.
An asset means any property, including property outside Australia.
According to section 5H of the VEA [12] income is:
According to section 52ZZB of the VEA, a trust is a designated private trust unless:
the following conditions are satisfied, that is the trust:
units [3] are held by 50 or more persons, and
the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual/s to avoid Division 11A (means test of private companies and private trusts), section 52ZZB of the VEA or the equivalent section of the Social Security Act, or
According to Section 52ZZA of the VEA, a company is a designated private company at a particular time if the company:
gross operating revenue is less than $25 million;
gross assets at the end of the financial year are less than $12.5 million;
the company has fewer than 50 employees at the end of the financial year, or
and the company is not an excluded company [3].
According to Section 5E(2) [14]of the VEA [14]a person is a member of a couple, if they are:
The term “partnered” is also commonly used.
An associate of an individual for the purposes of private trusts and private companies has the meaning given by section 52ZQ of the VEA [15].
A relative for the purpose of Part IIIB, Division 11A (means test treatment of private companies and private trusts), in relation to a person, has the meaning given by section 52ZP of the VEA [15].
An entity means any of the following:
an individual,
a company,
a trust,
a business partnership,
a corporation sole,
a body politic.
Commission may determine in writing that an entity having been included in a specified class of entities is a declared associate of an individual for the purposes of section 52ZQ of the VEA [15].
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 [15], 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 [15], trustee has the same meaning as in the Income Tax Assessment Act 1997 [16].
Company has the same meaning as in the Income Tax Assessment Act 1997.
For the purposes of Part IIIB, Division 11A (means test treatment of private companies and private trusts), a company is sufficiently influenced by an entity or entities if the company, or its directors:
to act in accordance with the directions, instructions or wishes of the entity or entities.
For the purposes of Part IIIB, Division 11A (means test treatment of private companies and private trusts), an entity or entities hold a majority voting interest in a company if:
the entity or entities are in a position to cast, or
control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the company.
Control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16467%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16467#tgt-cspol_part10_ftn432
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16467#tgt-cspol_part10_ftn433
[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/16467#ref-cspol_part10_ftn432
[7] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/10310-liabilities-private-trust-or-company-01012002/non-recognised-liabilities-controlled-private-company-or-trust
[8] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/10310-liabilities-private-trust-or-company-01012002/recognised-liabilities-controlled-private-company-or-trust
[9] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/10311-assessment-capital-injection-private-trust-or-company-01012002/gifting-private-trust-or-company
[10] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/10314-resignation-private-trust-or-company/resignation-controlled-private-trust-or-company-or-after-1-january-2002
[11] https://clik.dva.gov.au/book/export/html/16467#ref-cspol_part10_ftn433
[12] http://clik/health-procedure-library/health-information-and-management-notes-himn/vhc/072014-vhc-veterans-home-care
[13] clikpopup://DEF/Excluded%20trust
[14] http://www.comlaw.gov.au/Series/C2004A03268
[15] http://clik.dva.gov.au/legislation-library
[16] http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200401745?OpenDocument