Lotteries to attract 28% GST from March 1

Currently, a state-run lottery attracts 12% GST, while a state-authorised lottery attracts 28% tax.

A 28% Goods and Services Tax (GST) will be levied on lotteries from March 1, according to a notification.

The GST Council had in December last year decided to impose a single rate of 28% on state-run and authorised lotteries.

The revenue department notified the GST rate on supply of lotteries and amended its earlier Central Tax (Rate) notification.

Accordingly, the Central Tax rate for supply of lotteries has been amended to 14% and a similar percentage will be levied by the states. This will take the total GST incidence on lotteries to 28%.

“This notification shall come into force on the 1st day of March, 2020,” the revenue department notification said.

Currently, a state-run lottery attracts 12% GST, while a state-authorised lottery attracts 28% tax.

There were demands that a uniform tax rate should be imposed on lotteries following which a group of ministers were set up to suggest the GST rate. Following this, the GST Council in December voted for a single rate of 28% on supply of lotteries.

AMRG & Associates Senior Partner Rajat Mohan said: “Gambling in the form of Lottery has been allowed in a few states, where it has penetrated at grass root levels, now changing the tax rate from a prospective date would help the dealers in effectively implementing the new tax rate”.

EY Tax Partner Abhishek Jain said a uniform rate on lottery brings a parity between state-run and authorized lotteries; thereby aligning an equal footing for businesses in the same line.

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Biohaven Pharma (BHVN) Has A Pair Of Important Catalysts In Q1

Biohaven Pharmaceutical Holding Company Ltd. (BHVN), which disappointed investors early this month, following negative results from its phase III trial of Troriluzole in Generalized Anxiety Disorder, has two more catalysts to watch out for this quarter.

Biohaven is a clinical-stage biopharmaceutical company with a pipeline of product candidates targeting neurological diseases, including rare disorders.

The Company’s most advanced drug candidate is Rimegepant, an orally available, selective and potent small-molecule calcitonin gene-related peptide (CGRP) receptor antagonist, for the treatment of migraine.

CGRP is expressed in various nerve cells, and when it is released causes blood vessels to dilate and press on the nerve endings, leading to pain. Therefore, blocking CGRP is known to reduce pain in migraine pathophysiology.

Near-term Catalysts:

Biohaven’s New Drug Applications for Rimegepant ODT and tablet formation, seeking approval for the acute treatment of migraine, are under FDA review, with a decision expected this quarter.

Rimegepant is also being evaluated in the preventive treatment of migraine and a phase III trial in this indication is underway, with topline data due this quarter.

Competitors & Market Potential:

Aimovig, co-developed by Novartis and Amgen, Teva’s Ajovy, Eli Lilly’s Emgality and Allergan’s Ubrelvy are approved CGRP inhibitors for migraine – the same class of drugs to which Biohaven’s investigational Rimegepant also belongs to.

Rimegepant, if approved, could bring in $897 million in annual sales in 2024, according to EvaluatePharma.

According to the Migraine Research Foundation, migraine affects 39 million men, women and children in the U.S. and 1 billion worldwide. It is the 6th most disabling illness in the world.

Will the armamentarium of CGRP inhibitors for migraines get a new addition this year?

BHVN has traded in a range of $36.69 to $67.86 in the last 1 year. The stock closed Friday’s trading at $45.34, down 1.18%.

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I ended up with a massive bill for a plastic surgeon I didn’t want

Dear John: On May 28, 2018, I dropped a glass and it broke. When I went to pick up the pieces, I severely sliced my right hand and went to the emergency room at Long Island Jewish Medical Center.

When I arrived at the ER, the first question the nurse asked me was: “Do you want a plastic surgeon in case there is a scar?”

I immediately said no. My exact words were, “Absolutely not. I just need to see a doctor immediately.” After I declined the plastic surgeon, I waited approximately 15 minutes for the doctor to arrive.

It was not the doctor; it was the plastic surgeon that I absolutely declined. He gave me 10 stitches, and I was out of work for a week. I went to my primary physician to remove the stitches, and went back to work immediately that day.

I now have a bill of $20,680 in collection that is severely damaging my credit score. I wrote several letters to LIJ and the doctor’s office telling them that I declined a plastic surgeon. And my brother took me to the ER, so he can attest to that.

John, please help me with this because there is no way I can afford this in my lifetime, after declining the request/need for a plastic surgeon. Thanks C.M.

Dear C.M.: OK, I took care of this for you. My understanding is that you now owe nothing.

The doctor is willing to accept the $3,000 he got from your insurance company, which, of course, is a gift to him because you didn’t want him to do the work in the first place.

But that’s another story. And if I were your insurance company, I’d take this doctor to task for inserting himself into a situation where he wasn’t wanted.

Anyway, here’s what happened.

I didn’t call the doctor’s office. And I didn’t call the hospital, which had no responsibility in sending the bill. I did call the company that owns the hospital. That’s Northwell Health.

My contact there was very disturbed by your story and Northwell, which was extremely helpful, took up your cause with the doctor.

The doctor office’s explanation? According to Northwell, the doctor didn’t like the $3,000 he was getting (for 10 stitches!) and wanted the insurance company to pay more. But he couldn’t get more unless you filled out some forms because your insurance is out of state.

For some reason you didn’t sign the forms, and they couldn’t reach you. So the office upped his bill to $20,000 and gave it to a collection agency. (Why? I guess because they wanted to get your attention.)

Thankfully, there aren’t many doctors who behave this badly. The American Medical Association should contact Northwell to get this guy’s name and look into this so it doesn’t happen to anyone else.

Anyway, he wanted to get your attention. I hope we got his.

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Baby Yoda busting out at Toy Fair New York

What’s cute, green and everywhere you look at Toy Fair?

Adorable little Baby Yoda — the breakout star of the Disney+ streamer “The Mandalorian,” has stolen the hearts of “Star Wars” fans across the galaxy and soon will bombard those fans with countless products.

Toy FairToy FairI.jpbaby-yoda-toy-fair-the-childToy FairToy FairToy FairToy Fairbaby-yoda-toy-fair-the-child-1

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Bernie Sanders wins Nevada caucuses, takes national Democratic lead

LAS VEGAS (AP) — Bernie Sanders scored a resounding victory in Nevada’s presidential caucuses on Saturday, cementing his status as the Democrats’ national front-runner amid escalating tensions over whether he’s too liberal to defeat President Donald Trump.

The 78-year-old Vermont senator successfully rallied his fiercely loyal base and tapped into support from Nevada’s large Latino community as the Democratic contest moved for the first time into a state with a significant minority population.

The win built on Sanders’ win earlier this month in the New Hampshire primary. He essentially tied for first place in the Iowa caucuses with Pete Buttigieg, the former mayor of South Bend, Indiana, who has sought to position himself as an ideological counter to Sanders’ unabashed progressive politics, but was fighting for a distant second place in Nevada.

The victory, while encouraging for Sanders supporters, only deepens concern among establishment-minded Democratic leaders who fear that the self-described democratic socialist is too extreme to defeat Trump. Sanders for decades has been calling for transformative policies to address inequities in politics and the economy, none bigger than his signature “Medicare for All” health care plan that would replace the private insurance system with a government-run universal system.

Despite establishment anxiety, moderates are struggling to unify behind a single candidate, and the vote on Saturday was again split between several centrists, including Buttigieg and former Vice President Joe Biden.

Also in the mix: Massachusetts Sen. Elizabeth Warren, who desperately needed a spark to revive her stalled bid; billionaire Tom Steyer, who spent more than $12 million on Nevada television, and Minnesota Sen. Amy Klobuchar, who hoped to prove her strong New Hampshire finish was no fluke.

After the chaos of Iowa’s caucuses, there were concerns about Nevada’s similar setup. But no major problems were in sight.

At noon, under sunny skies, dozens of uniformed housekeepers and casino workers cast ballots in the Bellagio, one of seven casino-resorts on the Las Vegas Strip among 200 locations statewide that hosted caucuses. Nevada is the third contest on a 2020 election calendar marked by chaos and uncertainty after the opening votes in Iowa and New Hampshire, overwhelmingly white, rural states.

The first presidential contest in the West is testing the candidates’ strength with black and Latino voters for the first time in 2020. Nevada’s population aligns more with the U.S. as a whole, compared with Iowa and New Hampshire: 29% Latino, 10% black and 9% Asian American and Pacific Islander.

Self-described democratic socialist Sanders has emerged as the front-runner in the race so far as a half-dozen more-moderate candidates criticize one another. Each wants to be the preferred alternative to the Vermont senator in the race to take on President Donald Trump in November.

In a show of confidence, Sanders left Nevada early to rally supporters in Texas, which offers one of the biggest delegate troves in just 10 days on Super Tuesday. The progressive senator told cheering supporters in El Paso that Trump is “a pathological liar running a corrupt administration.”

“When we come together there is nothing we can’t accomplish,” Sanders declared.

The Nevada verdict represents the third in a primary season that will span all 50 states and several U.S. territories, ending only at the party’s national convention in July. But with two more rounds of voting scheduled over the next 10 days — including Super Tuesday’s massive delegate haul — the party may identify a consensus candidate long before the convention.

Sanders and his allies were increasingly confident about his strength in the race. In Nevada, he has strong support from Latinos and rank-and-file union workers who have warmed to his calls to transform the nation’s economy and political system to help the working class.

There was skepticism about Pete Buttigieg’s ability to win over a more diverse set of voters after strong finishes in Iowa and New Hampshire. Joe Biden, who struggled in those early states, looked to Nevada’s voters of color to prove he still has a viable path to the nomination.

Elizabeth Warren and Klobuchar were fighting for momentum, hoping to benefit from a sudden surge of outside money from newly created super PACs.

Klobuchar, campaigning in her home state of Minnesota Saturday night, claimed Nevada success no matter what. “As usual I think we have exceeded expectations.”

New York billionaire Mike Bloomberg, who dominated the political conversation this week after a poor debate-stage debut, wasn’t on the ballot. He’s betting everything on a series of delegate-rich states that begin voting next month.

Billionaire Tom Steyer spent more than $12 million of his own money on television advertising in Nevada, according to data obtained by The Associated Press.

Trump weighed in on social media, continuing his weeks-long push to sow discord between Sanders and his Democratic rivals.

“Looks like Crazy Bernie is doing well in the Great State of Nevada. Biden & the rest look weak,” Trump tweeted. “Congratulations Bernie, & don’t let them take it away from you!”

The stakes were high for Nevada Democrats to avoid a repeat of the chaos in Iowa, and it appeared Saturday’s caucuses were largely successful.

The developer the Nevada Democrats had planned to use had its mobile app fail spectacularly in Iowa. Nearly three weeks later, Iowa Democratic officials have yet to post final results. But resources poured into Nevada, as Democrats realized they could ill afford another poorly executed election.

Unlike state primaries and the November election, which are run by government officials, caucuses are overseen by state parties.

Nevada Democrats sought to minimize problems by creating multiple redundancies in their reporting system, relying on results called in by phone, a paper worksheet filled out by caucus organizers, a photo of that worksheet sent in by text message and electronic results captured with a Google form. They relied on trusted commercial tech that appeared to smooth the process.

In addition, it appeared Nevada Democrats were able to successfully navigate a complicated process for adding early voting to the caucus process. Nearly 75,000 people cast early ballots over a four-day period, and the party was able to process those in time for Saturday so they could be integrated into the in-person vot.

At the Bellagio caucus site, 41-year-old Christian Nielsen, a scuba diver for the Cirque du Soleil show “O,” said he backed Sanders because he believes the country needs a “major change in the White House.”

“We need somebody in the White House who has been on the right side of history for their entire career, somebody who stands with the working class, and will make things more fair for everybody,” Nielsen said.

The Democrats’ 2020 nomination fight shifted beyond Nevada even before the final results were known.

Only Biden, Buttigieg and Steyer were still in the state when news of Sanders’ victory was announced.

Sanders and Klobuchar spent the night in Super Tuesday states. And Warren, who began Saturday in Las Vegas, was to finish the day in Washington state, which hosts its election on March 10 but has already begun offering early voting.

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Don’t buy China’s story: The coronavirus may have leaked from a lab

At an emergency meeting in Beijing held last Friday, Chinese leader Xi Jinping spoke about the need to contain the coronavirus and set up a system to prevent similar epidemics in the future.

A national system to control biosecurity risks must be put in place “to protect the people’s health,” Xi said, because lab safety is a “national security” issue.

Xi didn’t actually admit that the coronavirus now devastating large swathes of China had escaped from one of the country’s bioresearch labs. But the very next day, evidence emerged suggesting that this is exactly what happened, as the Chinese Ministry of Science and Technology released a new directive entitled: “Instructions on strengthening biosecurity management in microbiology labs that handle advanced viruses like the novel coronavirus.”

Read that again. It sure sounds like China has a problem keeping dangerous pathogens in test tubes where they belong, doesn’t it? And just how many “microbiology labs” are there in China that handle “advanced viruses like the novel coronavirus”?

It turns out that in all of China there is only one. And this one is located in the Chinese city of Wuhan that just happens to be . . . the epicenter of the epidemic.

That’s right. China’s only Level 4 microbiology lab that is equipped to handle deadly coronaviruses, called the National Biosafety Laboratory, is part of the Wuhan Institute of Virology.

What’s more, the People’s Liberation Army’s top expert in biological warfare, a Maj. Gen. Chen Wei, was dispatched to Wuhan at the end of January to help with the effort to contain the outbreak.

According to the PLA Daily, Gen. Chen has been researching coronaviruses since the SARS outbreak of 2003, as well as Ebola and anthrax. This would not be her first trip to the Wuhan Institute of Virology either, since it is one of only two bioweapons research labs in all of China.

Does that suggest to you that the novel coronavirus, now known as SARS-CoV-2, may have escaped from that very lab, and that Gen. Chen’s job is to try and put the genie back in the bottle, as it were? It does to me.

Add to this China’s history of similar incidents. Even the deadly SARS virus has escaped — twice — from the Beijing lab where it was — and probably is — being used in experiments. Both “man-made” epidemics were quickly contained, but neither would have happened at all if proper safety precautions had been taken.

And then there is this little-known fact: Some Chinese researchers are in the habit of selling their laboratory animals to street vendors after they have finished experimenting on them.

You heard me right.

Instead of properly disposing of infected animals by cremation, as the law requires, they sell them on the side to make a little extra cash. Or, in some cases, a lot of extra cash. One Beijing researcher, now in jail, made a million dollars selling his monkeys and rats on the live animal market, where they eventually wound up in someone’s stomach.

Also fueling suspicions about SARS-CoV-2’s origins is the series of increasingly lame excuses offered by the Chinese authorities as people began to sicken and die.

They first blamed a seafood market not far from the Institute of Virology, even though the first documented cases of Covid-19 (the illness caused by SARS-CoV-2) involved people who had never set foot there. Then they pointed to snakes, bats and even a cute little scaly anteater called a pangolin as the source of the virus.

I don’t buy any of this. It turns out that snakes don’t carry coronaviruses and that bats aren’t sold at a seafood market. Neither are pangolins, for that matter, an endangered species valued for their scales as much as for their meat.

The evidence points to SARS-CoV-2 research being carried out at the Wuhan Institute of Virology. The virus may have been carried out of the lab by an infected worker or crossed over into humans when they unknowingly dined on a lab animal. Whatever the vector, Beijing authorities are now clearly scrambling to correct the serious problems with the way their labs handle deadly pathogens.

China has unleashed a plague on its own people. It’s too early to say how many in China and other countries will ultimately die for the failures of their country’s state-run microbiology labs, but the human cost will be high.

But not to worry. Xi has assured us that he is controlling biosecurity risks “to protect the people’s health.” PLA bioweapons experts are in charge.

I doubt the Chinese people will find that very reassuring. Neither should we.

Steven W. Mosher is the President of the Population Research Institute and the author of “Bully of Asia: Why China’s ‘Dream’ is the New Threat to World Order.”

This article was first published on NYPost.com

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Agricultural commodities may get a post-coronavirus boost

The coronavirus epidemic in China has raised concerns over a slowdown in the global economy, but agricultural commodities such as wheat, corn, and cattle are unlikely to suffer, and may get a boost when coronavirus worries ease analysts say.

“There will be no real demand destruction in agriculture from the coronavirus,” says Sal Gilbertie, president and chief investment officer at Teucrium Trading. “People still need to eat, which means agriculture demand will not abate.”

The coronavirus “lethargy” in grain and meat prices could provide investors with a chance to gain access to agricultural commodities prior to any Chinese buying that will occur from the U.S.-China phase-one trade agreement, he says.

Corn futures CK20, -0.13% fell by more than 2% while wheat WK20, +0.14%  was little changed, and SK20, -0.31% lost nearly 7% this year through Thursday. Lean hog prices LHJ20, +0.11%  declined by over 6%, with live cattle futures LCJ20, +0.00%  losing more than 5%. Cotton CTK20, -0.61%, meanwhile, trade 0.4% higher so far this year.

The rising coronavirus infection count and death tolls have had a “bearish emotional impact” on commodity prices that are most sensitive to Chinese demand, including soybeans, says Todd Hultman, lead analyst at commodity market information and analysis provider DTN.

Commodities have all reacted differently to the new coronavirus, with haven gold GCJ20, -0.18% on the rise as oil CLJ20, +0.15% declines on the back of expectations for lower energy demand.

In the agricultural market, lean hogs were “hit the hardest” by the coronavirus, says Craig Turner, senior commodities broker with Daniels Trading.

When phase one of the trade deal went into effect on Jan. 15, “we were expecting China to buy large amounts of pork starting on Jan. 25,” he says.

The coronavirus, however, “was gaining steam in the press in late January, and when the market started to worry about the virus,” hog prices came down, he says.

Turner believes that soybeans, beef, pork, and cotton are the “most at risk” from the virus in the short term because those are products that China buys from the U.S. Cotton, in particular, is linked to textiles and manufacturing, not food or animal feed.

Still, Hultman points out that “if and when the disease concerns stabilize, we may actually find that the Chinese government will need to make more food purchases to help cities where quarantines depleted local supplies.”

In the meantime, there have been concerns that China may not meet its trade deal obligation to purchase $36.5 billion of U.S. agricultural commodities this year and $43.5 billion in 2021, says Dan Cekander, president of grain-market service DC Analysis, adding that he believes the coronavirus has delayed Chinese buying under the trade pact.

Cekander expects China to comply with the agreement terms, but if the coronavirus remains headline news until the summer, there is “increased risk” of China asking for a reduction in its 2020 purchase obligations.

Those obligations were already “very challenging,” says Darwei Kung, head of commodities and portfolio manager at global asset manager DWS Group.

With the coronavirus, it is more likely that China would delay the implementation while the government focuses on using its resources to fight the spread of the disease, Kung says. The implementation may “only resume post-resolution’’ of the epidemic, he says.

However, the impact of the virus on food consumption is much less than that on energy consumption, says Kung.

“While people in China have traveled less or delayed factory reopenings, aggregate food consumption is less likely to be deferred or delayed,” he says.

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Businesses get bigger butterflies over coronavirus and that’s not good for the economy

The hope going into 2020 was that the U.S. economy would get an adrenal rush from stronger business investment after an interim deal that tempered trade tensions with China.

Those hopes appear to have been dashed.

A spreading coronavirus in China and elsewhere is snarling global supply chains, making it harder to obtain parts for new autos, produce iPhones or cater to jet-setting tourists, among other things. The disruption is bound to hurt sales and production and make companies even more hesitant to invest in big new projects.

The first major sign of the damage the viral outbreak is causing to the U.S. economy came last week from a survey of business executives. IHS Markit said its barometer of business conditions turned negative in February for the first time in four years. A number of companies including Apple AAPL, -2.26% also warned that sales could fall short of forecast.

For weeks, most economic forecasters have been sticking to the view that corona-related disruptions would be temporary. Just last Friday, several senior Federal Reserve officials predicted the hit to the U.S. would be “short” one.

Even if they are right, though, a big dose of uncertainty is suddenly clouding the economic outlook. The seemingly clear skies from last month have largely been obscured. The Dow Jones Industrial Average DJIA, -0.78%, S&P 500 SPX, -1.05% both fell last week and bond yields tumbled to fresh lows.

“The coronavirus is rapidly slowing the momentum of the global economy and sucking the oxygen out of financial markets,” said Scott Anderson, chief economist at Bank of the West.

And: Industrial output slumps in January for fourth decline in past five months

In more ordinary times, Wall Street would be zeroing in this week on the latest trends in business investment including the monthly report on durable goods when it is published Thursday.

Yet even if investment rebounded in January, and economists predict no gain, it’s already old news. Investors want to know what happened in February after the viral epidemic captured headlines around the world. Instead they’ll have to wait another month to learn the answer.

By that time, the viral outbreak could be under control and the economic outlook could turn sunny again, but don’t expect businesses to jump to any conclusions given the lack of progress so far in containing the COVID-19 outbreak.

“Clearly there are enough shockingly weak data points cropping up in China, and elsewhere to counsel caution in the face of this great unknown,’ said Douglas Porter, chief economist at BMO Capital Markets.

Another worry of business executives is the increasing likelihood that Bernie Sanders, a self-described socialist, could win the Democratic primary vote and to set up a showdown with President Trump in the November elections.

The senator from Vermont appears to have taken a clear lead over his rivals early in the race. Sanders has promised to sharply raise business taxes and increase regulations if elected.

Some companies say they’ve become more cautious in the face of “growing uncertainty ahead of the presidential election later this year,” according to chief business economist Chris Williamson of IHS Markit.

The potential nomination of Sanders as the Democratic party’s presidential candidate has caused one prominent Democratic-leaning Wall Street bigwig, former Goldman Sachs CEO Lloyd Blankfein, to say he would find it hard to vote for Sanders.

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Homewares retailer powers Powell to Shares Race victory

Dominic Powell, retail reporter at The Sydney Morning Herald and The Age, has edged out Richard Hemming, of Under The Radar Report, to win the Shares Race by one of the narrowest margins in the history of the game.

Just $80 separate the pair in the value of their portfolios at the end of the six-week contest, with Powell finishing with more than a 10 per cent gain on his original investments at $110,781. Hemmings' portfolio was worth $110,701.

Dominic Powell edges out Richard Hemming to win the six-week Shares RaceCredit:Fairfax Media

Powell did well with four particular stocks. Temple & Webster was top pick, with his original $10,000 investment in the online furniture and homewares retailer soaring to $14,107. His next best pick Vmoto, which makes electric scooters, was worth $13,333.

Others to do well included medical cannabis company Cann Group ($12,706) and challenger bank Tyro Pay ($12,456).

Hemming's best pick was Medical Developments, with his original $10,000 investment in the company, whose product range includes pain management, asthma and resuscitation and veterinary equipment, worth $12,752.

Third-placed Chris Conway, of daily stock market newsletter Marcus Today, held the best-performing stock tip of all – Polynovo. His original $10,000 investment in the the medical technology company grew to a value of $15,446.

The sharemarket, as measured by the S&P/ASX 200 index, finished the week up about one per cent at 7,162 points on Thursday, the day the competition ended.

The Shares Race is a fantasy shares game that runs for six weeks. Players start with $100,000, divided evenly across 10 stocks. Their progress is reported weekly.

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There are only limited opportunities to defer capital gains tax

You recently mentioned deferring a capital gains tax (CGT) liability. How do you defer the tax liability after selling one investment property with capital gains being $220,000, and place the money into another property? Does all money have to go into the new property, or can you keep some out to use now? R.S.

If you are thinking of a recent item in this column about deferring CGT when a property was sold, it was only mentioned in the context that the sale might have been classified as an involuntary disposal, where a property may be “lost, destroyed or compulsorily acquired”.

CGT can be deferred where a small business re-structures or replaces an asset, or there is a relationship breakdown, or a scrip-for-scrip takeover or a demerger.Credit: Kerrie Leishman.

If you are simply selling a property and reinvesting in another there are only limited opportunities to defer CGT. For example, where a strata title is converted, or a person (or a partnership or a trustee) transfers an asset to a wholly owned company, or related companies transfer an asset between them.

More generally, CGT can be deferred where a small business re-structures or replaces an asset, or there is a relationship breakdown, or a scrip-for-scrip takeover or a demerger.

Even if you believe you have a case to defer CGT, which I suspect you may not, don’t even think about buying another property without confirming your belief with a well-grounded tax accountant.

I’m 72 years old and my husband is 75. We are on the full age pension and we own our home. A few years ago, my husband was diagnosed with diabetes and became paralysed and had to go into a nursing home. His pension is used to pay for it. For me, I am on the full single age pension. We have two grown up children. All four of us own a property, which is shared equally among us. Centrelink estimates my share is about $168,000. At the moment, we are still paying the mortgage and are not able to use the rent, which is $450 per week. Later, when we can use the rent, each share would be $112 per week, before agent’s fees, rates etc. We don’t have money in the bank or shares. I have a car. Could you please tell us how that income ($112 per week each) would affect my husband staying in the nursing home and my age pension? For now, we don’t have to pay for his care at the nursing home as he does not have any money. M.N.

As background, pensioner couples separated by illness each receive the single age pension ($933.40 a fortnight) instead of the married pension ($1407) but are still assessed on their combined income and assets.

Under Centrelink’s assets test, all homeowner couples – even if separated by illness – can have up to $394,500 in assets before their pensions begin to reduce.

The test counts the combined share of your investment property, reduced by your share of the mortgage, so it sounds as though the test counts $336,000 for the two of you. However, this is likely to grow once the mortgage is paid off. Above the threshold, the pension is reduced by $3 a fortnight for every extra $1000.

Without knowing the size of your mortgage, I cannot estimate the effect on your assets test.

The income test for couples separated by illness allows income of $174 a fortnight each, or twice the singles threshold, before their pensions begin to reduce at the rate of 50 cents per fortnight for every additional dollar.

Your rent, once it starts to flow through to you, could be reduced by about 10 per cent, or more, once agent’s fees and other costs are factored in, in which case you could expect combined net rent between the two of you of about $400 a fortnight. I estimate this would reduce your fortnightly pension by about $13 each.

As an alternative, could your children buy your share of the property?

I sold my home in Coogee for $2.4 million and bought a unit for $1.46 million. After paying out necessary expenses and furnishing the unit, I was left with about $750,000. Prior to selling my home, I was on the aged pension, although still working casually. After three years in the unit without the pension I find myself with a balance of about $640,000 in the bank. My income from this, with the current low interest rate, is about $800 a month. I work 1-3 days a week and my average income is about $200-$300, minus tax ($29 an hour before tax). My expenses are quite high and I need to continually draw on my savings. How do I return to being on the age pension to assist me with car registration, doctor’s bills etc? I have about $11,000 in super and I am 78 years old. I am becoming anxious as to how long my money will last and don’t want to depend on my children. V.E.

A single person is able to claim a part age pension once their assets fall below $574,500, a figure which should rise with indexation each March and September.

Your bank account is falling at a rate of about $36,000 a year, which implies that, if things go on as before, you should be eligible within about two years.

In this period of low interest rates, and amid the Reserve Bank of Australia’s warnings that it is likely to continue for the foreseeable future, people who have lodged their savings in banks for a lifetime are being forced to look elsewhere for a decent return on their money, which means taking on higher risk.

To my mind, the lowest-risk option that meets this goal is to invest in a balanced fund, which spread its money across a variety of different sectors – from fixed interest to property to shares and the many sub sectors in between.

In fewer cases, people are ready to accept the lessons of history that, in the long run, shares provide the highest returns.

I prefer a master trust with a range of options, an example of which is the Colonial First State Wholesale investment fund, which offers a dozen funds titled “Balanced”, “Moderate” or “Diversified”, as well as top share funds such as the Fidelity, Blackrock and CFS Imputation Australian share funds.

You pay your money and you takes your choice, as the old saying goes.

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00. All letters answered.

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