I’m on the Disability Pension and have just bought shares for the first time. I’m severe and permanently disabled so what I’d like to do is sit on these shares for a while but not have them interfere with my Centrelink payments, either through asset testing or income stripping. I was thinking of transferring the shares to a seperate legal entity, ie: a trust or pty ltd. Can someone advise on whether this is feasible and perhaps where to find free or cheap advice to help me set such a thing up?
welcome to InvestChat and sad to hear you have joined me on a disability pension SOME dividend shares pay franking credits ( essentially the company pre-pays the tax for you ) do you really need to go that complexity , i decided to go the simple less complicated path , realizing the government will change the rules whenever they feel like it ( as Bill Shorten tried to do before being elected as national leader ) i will leave the financial guidance to the industry professionals and students that visit here good luck the whole economy is in tumultuous times ( are therefore your share returns )
As far as i have read, if you have a trust and any interest in it eg trustee/beneficiary/appointor, all the assets and income of the trust will be attributable to you.
Thanks for the feedback. My initial strategy was to go sole proprietor as a Share Trader, under the guidelines laid out here: Shareholding as investor or share trading as business? I’d declare my investments as a loss, along with sundry other expenses as usual, and reinvest my dividends. I thought that might be the best short term solution. I already have a draft business plan and am using technical analysis. I also have a mentor so I could make a serviceable case to the ATO. I’d maybe work towards incorporating down the track, or not. I assume if I buy some property, which is my eventual goal, I’d do that under the business name and would include that in my Plan as ‘future diversification’. Still appreciate any articles or pointers in the right direction to educate myself about all this.
Have a look at special disability trusts - I am not sure if the beneficiary can contribute to them though.
You should seek an appointment with a Centrelink Financial Information Officer as a starting point - they know the rules well and will give you some options on whether you need to do anything at all (you could be well below the asset / income test thresholds). Think about investing via super. If you're under age pension age then any assets in super are not asset / income tested. (Source: Disability Support Pension - Superannuation - Services Australia ) You are 'severely and permanently disabled' (in your words) therefore you should have access to withdraw super any time - so you can get the tax / non-testing benefits of investing via super, but still have the access if you need it. It might also be worthwhile seeking out a fee for service financial adviser who can provide you some initial advice (i.e. in a consultation) and if required they can provide more formal advice for your situation. All the best.