I know of some folks who as they approach retiring age, would like to purchase some acreage. But apparently, they will not get a full pension if property is greater than 2 hectares. With anything over that size, the government sends out a valuer and their pension will be reduced accordingly.
If they make such a purchase, they’d prefer not to have to give it up, just so they can get back their money to live on.
(Personally, I think the situation is ill-thought out by government and it STINKS! People would have to sell up farms that have been in their families for decades.) [angry2]
Anyway… Is anyone aware of a way for them to buy the land, but have it “disconnected” from them – so as to not appear as their personal asset?
Is it possible to subdivide it, have 1 hectare (where the house is situated) listed as their asset, but the rest listed as being owned by a trust… One that doesn’t produce an income (and so no funds are distributed)?
Or perhaps a company that produces no profit??
Suggestions!? [blink]
Allan.
Tricky one Allan
Putting tha asset in a trust would distance the it but then there is CGT, Land tax and possible frindge benifits tax issues.
Subdividing can also be costly and if you already own it then you need to transfer the title into the trust or if you are buying it then you can’t subdivide untill you own it.
Super is also an asset so that is no good.
E-mail me and we can talk in more detail.
CATAFor a few years now Centrelink has been looking at properties own by trusts and companies. One someone contols a trust, then the assets of a trust will be treated as if they owned them themselves.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Dear JustAllen, There is no reason why you can’t still live on a farm and receive a pension. I do not think it unreasonable for Centrelink to assume you are capable of making money if you are holding 20 to 30 acres. It is similar to holding a lot of cash, Centrelink will ‘deem’ you are capable of earning interest and assess you accordingly. Even if you do not intend to work the property you can lease/agist it out and acquire a consideration that way. I am aware that you can demonstate to Centrelink that you are not in fact farming and continue to hold and live on a property with full pension. However, If you are going to acquire a property and ‘run a few head’ there is a chance that you are going to make money
and, as a result, since pensions are means tested your pension will be affected. The point is, however, if you do make money you will be further ahead than just earning the pension. It is a bit like taxation, if you pay tax you are earning money and the more tax you pay the more money you have!I would like to suggest that you may be better off raising a few cows than collecting the pension anyhow.
The farm may be deemed an asset and affect the pension but an unworked farm will not make any money. Cashflow is King and if the pension is affected so is the Cashflow. Living week to week is not for me but their is alot who need to(for whatever reason)
Also, they may not be able to raise a few cows as this is also a cost week to week. Physical limit are also a factor.
CATA
Asset Protection Specialist
[email protected]
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