Published on 01 May 12
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
On 1 January 2002, the provisions of the Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies — Integrity of Means Testing) Act 2000 came into effect. The large lead time was given to allow Centrelink sufficient time to put the necessary processes in place to administer what was recognised as complex legislation. The new legislation is primarily directed to individuals using trusts to hide their assets. It includes a control test to determine who is the ultimate or actual controller of trust assets, and a source test to determine whether assets transferred to a trust will continue to be used for the transferor’s benefit. There are safeguarding provisions built into the legislation.
This article presents an analysis of the dilemma faced by Centrelink when applying the complex means test provisions to wealthy individuals hiding assets and income in private trusts and companies. A detailed case study is provided.
Current at 16 May 2012