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Topic Started: 16 Sep 2015, 11:28 AM (5,173 Views)
herbie
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peter fraser
17 Sep 2015, 09:13 AM
Paul you receive a share of the income distribution from the trust. So although the income will become part of your income test should you ever apply for a pension, the asset won't be because it's within a trust that you don't control.

No one is suggesting that your family isn't entitled to do that, but it is hypocritical to attack the home ownership of everyday people just because their house value has risen whilst not acknowledging that your own family assets are protected by the veil of a trust.

For example if those older residents transferred ownership of their home to a trust that another family member controlled, that elderly resident would have the same asset protection that your families assets enjoy. But most people just don't go to those lengths to protect themselves from a government trying to take their home away from them because they believe that a responsible government will allow them to live their latter years in peace before they die.

And you know it's not an unreasonable request is it, to be left alone to live out their few remaining years.
It would be funny as all fuck if a large chunk of the trust assets were invested in residential property - LOL!

But they probably aren't, or he wouldn't be so keen on land taxes ... :)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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ThePauk
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peter fraser
17 Sep 2015, 09:13 AM
Paul you receive a share of the income distribution from the trust. So although the income will become part of your income test should you ever apply for a pension, the asset won't be because it's within a trust that you don't control.

No one is suggesting that your family isn't entitled to do that, but it is hypocritical to attack the home ownership of everyday people just because their house value has risen whilst not acknowledging that your own family assets are protected by the veil of a trust.

For example if those older residents transferred ownership of their home to a trust that another family member controlled, that elderly resident would have the same asset protection that your families assets enjoy. But most people just don't go to those lengths to protect themselves from a government trying to take their home away from them because they believe that a responsible government will allow them to live their latter years in peace before they die.

And you know it's not an unreasonable request is it, to be left alone to live out their few remaining years.
Peter, you are wrong yet again. If you contributed a house to a Trust, then it (that value in the Trust) would be deemed as your asset and inc into the asset test for any welfare.
If you gifted the house to your family before retirement, well that is different.

People who own multi million dollar homes should not get welfare.
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The Whole Truth
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And soon they won't I expect.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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peter fraser
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ThePauk
17 Sep 2015, 09:36 AM
Peter, you are wrong yet again. If you contributed a house to a Trust, then it (that value in the Trust) would be deemed as your asset and inc into the asset test for any welfare.
If you gifted the house to your family before retirement, well that is different.

People who own multi million dollar homes should not get welfare.
No Paul all you have to do is transfer the house to a trust and then relinquish control of the trust to another family member. Better still the house should have been bought by the trust in the first place. Lots of well off people do this, but battlers don't. They have faith that their government to look after them.

It's only included as an asset within a trust if you control the trust. A beneficiary is different again. You can receive an income from a trust as a beneficiary, but not have control, so the income is included but not the asset.
herbie
17 Sep 2015, 09:31 AM
It would be funny as all fuck if a large chunk of the trust assets were invested in residential property - LOL!

But they probably aren't, or he wouldn't be so keen on land taxes ... :)
It doesn't matter what the asset is. Pauks family trust may own shopping centres for all we know, and good luck to them.

You set up a holding company "Herbie Pty Ltd" and that company is the trustee for "the Herbie Family trust" and then buy all assets in the name of the trust. Before you retire you transfer control to your children on the understanding that you can live the rest of your life in the house and then they can do whatever they want. transferring control is just a matter of stepping down as the director and electing your son or daughter to the position.

Then it's not your asset and it doesn't affect your eligibility for a pension. If the trust earns an income, then any income distribution is counted, but the trust only has to distribute income if and how it chooses to.

It's gaming the system, but perfectly legal. Wealthy people do it quite often and I've certainly considered it, but battlers don't, and it's battlers who Pauk is attacking. I don't care about multi millionaires, they will survive OK, but a battler who wants to die in their family home shouldn't be evicted just because they got a bit lucky.
Edited by peter fraser, 17 Sep 2015, 10:05 AM.
Any expressed market opinion is my own and is not to be taken as financial advice
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ThePauk
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peter fraser
17 Sep 2015, 09:52 AM
No Paul all you have to do is transfer the house to a trust and then relinquish control of the trust to another family member. Better still the house should have been bought by the trust in the first place. Lots of well off people do this, but battlers don't. They have faith that their government to look after them.

It's only included as an asset within a trust if you control the trust. A beneficiary is different again. You can receive an income from a trust as a beneficiary, but not have control, so the income is included but not the asset.

It doesn't matter what the asset is. Pauks family trust may own shopping centres for all we know, and good luck to them.

You set up a holding company "Herbie Pty Ltd" and that company is the trustee for "the Herbie Family trust" and then buy all assets in the name of the trust. Before you retire you transfer control to your children on the understanding that you can live the rest of your life in the house and then they can do whatever they want. transferring control is just a matter of stepping down as the director and electing your son or daughter to the position.

Then it's not your asset and it doesn't affect your eligibility for a pension. If the trust earns an income, then any income distribution is counted, but the trust only has to distribute income if and how it chooses to.

It's gaming the system, but perfectly legal. Wealthy people do it quite often and I've certainly considered it, but battlers don't, and it's battlers who Pauk is attacking. I don't care about multi millionaires, they will survive OK, but a battler who wants to die in their family home shouldn't be evicted just because they got a bit lucky.
You are making shit up again. Evicted?
If the home is worth $1.25 million then $250k would be included into the asset test. No other assets and THEY WOULD STILL GET THE FULL PENSION!

You are also not correct about the Trust details. If is also assessed on contribution/source to the Trust to determine ownership of those assets in the Trust. It is called the 'Source' Test. Perhaps you should also read up?
http://www.humanservices.gov.au/customer/enablers/assets/private-trusts-and-private-companies

"Source test
The source test may apply where a person has transferred assets or services to a company or trust.
The source test recognises that if a person transfers assets or services to a trust or company and they have not received adequate consideration in return, they generally retain some means of control.
Where a person can clearly show a genuine gift has been made and they have no ongoing involvement in the structure at all, attribution would not be made, though the gifting of those assets may need to be assessed."
Edited by ThePauk, 17 Sep 2015, 11:45 AM.
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peter fraser
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ThePauk
17 Sep 2015, 11:35 AM
You are making shit up again. Evicted?
If the home is worth $1.25 million then $250k would be included into the asset test. No other assets and THEY WOULD STILL GET THE FULL PENSION!

You are also not correct about the Trust details. If is also assessed on contribution/source to the Trust to determine ownership of those assets in the Trust. It is called the 'Source' Test. Perhaps you should also read up?
http://www.humanservices.gov.au/customer/enablers/assets/private-trusts-and-private-companies

"Source test
The source test may apply where a person has transferred assets or services to a company or trust.
The source test recognises that if a person transfers assets or services to a trust or company and they have not received adequate consideration in return, they generally retain some means of control.
Where a person can clearly show a genuine gift has been made and they have no ongoing involvement in the structure at all, attribution would not be made, though the gifting of those assets may need to be assessed."
You forgot to quote this bit -

Quote:
 
Relinquishing control

If you relinquish control of a private trust or private company, you will be considered to have gifted the assets held by the trust or company. A 5 year deprivation period may apply. The deprived amount will be based on the market value of the deprived assets and your level of control.


It's just a matter of planning ahead. Those battlers who live in homes that have recently become expensive didn't think ahead like your grandfather, so they should be punished for their faith in good government.

Right?
Any expressed market opinion is my own and is not to be taken as financial advice
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ThePauk
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peter fraser
17 Sep 2015, 12:27 PM
You forgot to quote this bit -




It's just a matter of planning ahead. Those battlers who live in homes that have recently become expensive didn't think ahead like your grandfather, so they should be punished for their faith in good government.

Right?
You do not need to have any control for the 'Source Test' to apply.
Dear me Peter, you really do not understand this as you did not about German pensions.

If you gift your PPOR to your family well before retirement, then yes, you would avoid any potential asset test for the Pension, should the PPOR be included above a cap.
Same applies for your cash or any other investments and assets you may have to avoid the income test and yet people now are subject to the income test and have not 'gifted' it way before retirement.

People will not gift away as you think they will, as they do not now.
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peter fraser
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ThePauk
17 Sep 2015, 12:31 PM
You do not need to have any control for the 'Source Test' to apply.
Dear me Peter, you really do not understand this as you did not about German pensions.

If you gift your PPOR to your family well before retirement, then yes, you would avoid any potential asset test for the Pension, should the PPOR be included above a cap.
Same applies for your cash or any other investments and assets you may have to avoid the income test and yet people now are subject to the income test and have not 'gifted' it way before retirement.

People will not gift away as you think they will, as they do not now.
I'm not saying that people will gift away their homes, I'm saying that with forward planning they could have bought the house within a trust, so it's never a gift. The house and other assets are owned and controlled by the trustee, which is a company. They may have to gift their shares in the company or they may sell their shares to other family members, but as long as they do that well in advance there won't be an issue.

This is what wealthy people do to preserve their wealth. They don't necessarily do it to qualify for a pension although it may have that as a spin off benefit for some.

But put that to one side, can't you see that you are just taxing the families of battlers with your crazy plans?

It doesn't seem to worry you one bit that you are the beneficiary of a trust that has been set up to side step government means tests, and yet you want to penalise people who haven't tried to game the system at all.

You are just crazy and completely unfair.
Any expressed market opinion is my own and is not to be taken as financial advice
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ThePauk
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peter fraser
17 Sep 2015, 12:52 PM
I'm not saying that people will gift away their homes, I'm saying that with forward planning they could have bought the house within a trust, so it's never a gift. The house and other assets are owned and controlled by the trustee, which is a company. They may have to gift their shares in the company or they may sell their shares to other family members, but as long as they do that well in advance there won't be an issue.

This is what wealthy people do to preserve their wealth. They don't necessarily do it to qualify for a pension although it may have that as a spin off benefit for some.

But put that to one side, can't you see that you are just taxing the families of battlers with your crazy plans?

It doesn't seem to worry you one bit that you are the beneficiary of a trust that has been set up to side step government means tests, and yet you want to penalise people who haven't tried to game the system at all.

You are just crazy and completely unfair.
Peter, you really do not understand the 'Source' test at all, as demonstrated.

Battlers that live in multi-million dollar home? Yer right....

My family trust have nothing to do at all with trying to avoid any means test. Once again you are ignorant. It is not my capital, nor my kids, nor their kids capital.

People who own multi-million dollar homes should not get welfare.
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peter fraser
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ThePauk
17 Sep 2015, 01:20 PM
Peter, you really do not understand the 'Source' test at all, as demonstrated.

Battlers that live in multi-million dollar home? Yer right....

My family trust have nothing to do at all with trying to avoid any means test. Once again you are ignorant. It is not my capital, nor my kids, nor their kids capital.

People who own multi-million dollar homes should not get welfare.
You are blind in both eyes.
Any expressed market opinion is my own and is not to be taken as financial advice
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