Ian age 76 purchased a complying erm certain income stream o

Ian, age 76, purchased a complying erm certain income stream on 1 May 2004 with $250,000. The term of Ian\'s income stream is 15 years. How is this income stream treated under the assets test?

Note: Ian\'s life expectancy when he purchased his term certain income stream was 21.62.

Select one:

a. $135,000 is asset tested

b. 100% of the reduced purchase price is asset tested

c. the full amount is asset-test exempt

d. 50% is asset-test exempt

Solution

Asset Test

If one bought income stream

- Before 20 september 2004, it does,nt count in asset test

- After 20 september 2004 and before september 2007, half of its value counts in asset test

- on or after september 2007,it all counts in asset test

Since Ian,age 76, purchased a complying erm certain income stream on 1 May 2004 , asset test won\'t apply

Thus ans c. the full amount is asset-test exempt