Assessing sole trader assets 043-03110060

• If the business is no longer operating see Business has ceased or has been sold. Procedure ends here
• If this is the first advice of the business, either due to commencing a new business or claiming a payment, go to Step 2
• If an update is being made to a business previously recorded on REBS, go to Step 3

If the customer or their partner have either commenced a new sole trader business or are claiming a payment and are involved in a sole trader business, they will need to provide:

• A completed Business Details (MOD F) or complete the business module within an online claim
• Their latest individual tax return, and financial statements including a profit and loss statement, balance sheet and depreciation schedule
• A profit and loss statement and/or balance sheet if latest individual tax return and financial statements do not reflect the current circumstances of their business

See Documents required to assess a sole trader business.

Record details on a DOC or Note.

Procedure ends here until the customer provides the documents.

When documents provided, go to Step 3.

Is any real estate recorded on the balance sheet?

• Yes, proceed as follows to assess the real estate:
• If a Real Estate form (MOD R) has not been received or real estate details have not been advised within an online claim, request a MOD R
• If 'authority to inspect the property' has not been completed, request that it be completed
• If rates or valuation notice not received, request same
• If property is more than 2 hectares, issue the Rural Property Questionnaire (Q454)
• go to Step 4
• No, go to Step 5

If a valuation is required, see Assessment and sale of real estate and timeshare asset.

Use the 'authority to inspect the property' on the MOD R.

On the balance sheet (or list of assets and liabilities provided by the customer), adjust the value of the assets to their current market value (for example, motor vehicles and plant and equipment, etc.).

Financial assets such as bank accounts (except trading/working account), shares and managed investments if listed on the balance sheet, are considered personal assets rather than business assets (unless they form part of the working capital of the business - such as shares held by a share trader). If these financial assets are currently held, ensure they are recorded on the Savings Summary (SVS), Management Investments Summary (MIS) or Securities and Investments Summary (SIS) screens. See Sole traders and Partnerships.

If required, see Managed investments - adding a new investment and Coding income and assets for Centrelink payments and services.

Add up the adjusted values of the assets, and then deduct allowable liabilities from the total value of the assets. The result is the net assets, i.e. total adjusted assets less total adjusted liabilities equal net assessable assets.

Note: if unsure how to assess the sole trader, discuss with a Local Peer Support (LPS) who may then discuss with a Complex Assessment Officer (CAO) if necessary. If required refer to the CAO.

Go to Step 7.

Real Estate

New real estate should only be linked to a business where it is unavoidable. For example a non-primary production business where there is a liability over all business assets (real estate and other) and the value of the net business excluding the real estate are negative. Real estate should not be linked to a business unless advised and assessed by a Complex Assessment Officer (CAO).

• Where real estate is connected to the business, but not linked, the real estate is to be coded on RE screen and reviewed along with the business, but only the Current Market Value is recorded
• Where real estate is linked continue to Real Estate Details (RE) screen for the real estate:
• The estimated value should be balance sheet value
• The assessable value of the business will be automatically adjusted for the difference between the Estimated Value and Current Market Value recorded here

Financial investments

Code any bank (apart from trading/working account), shares and managed investments on Savings Summary (SVS), Managed Investments Summary (MIS) or Securities and Investments Summary (SIS) screens. The Self-employment workflow cannot be used to update SVS, MIS, or SIS screens.

To record sole trader assets determined, see Assessing and coding the Business details for sole traders and partnerships MOD F.