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Application of Assets Limit
Net assets limit of $500,000 applies
Under RASF, net sugarcane farm assets worth up to $500,000 can be transferred without being assessed under the deprivation provisions. The limit is a total limit for the person and applies to all interests. If a person has an interest in two sugarcane farming enterprises, the first valued at $350,000 and the second at $450,000, the person has total sugarcane farming interests of $800,000 and does not qualify under RASF.More ?
Transfer of sugarcane farms valued over $500,000
Sugarcane farm assets valued over $500,000 can be transferred under RASF provided the eligible descendant already has an interest in the sugarcane farm. In these cases, the total value of the sugarcane farm or farms being divested, less the value of the descendant's estate or interest in the sugarcane farm or farms, cannot exceed $500,000.
Example of transfer where descendant holds an interest
A retiring sugarcane farmer is involved in a sugarcane farm enterprise valued at $600,000. His son is a partner, holding a one-third share in the property. The value of the sugarcane farm assets being divested is $600,000 less the son's share of $200,000 = $400,000. Therefore the retiring sugarcane farmer is able to access RASF.
Requirement for qualifying sugarcane farmer
Section 49Q(1) VEA
Requirement for former partner
Section 49Q(2) VEA
Deprivation of income and assets
Value of farm reduced by value of transferee's interest
Section 49R(3) VEA
According to subsection 5PAA(1) of the VEA, a sugarcane farm is a farm that is used predominantly for the purposes of a sugarcane farm enterprise .
According to subsection 5P(1) of the VEA, an eligible descendant in relation to a person means:
- a child, step child or adopted child of the person or of a partner of the person, or
- a descendant in direct line of a child described above, or
- any other person who, in the opinion of the [glossary:Commission:DEF/Commission/Repatriation Commission], should be treated for the purposes of this definition as a person described in the above paragraph.
According to subsection 5PAA(1) of the VEA, a sugarcane farm enterprise is a farm enterprise where:
- a majority of the enterprise is undertaken for the purposes of farming commercial quantities of cane sugar, or
- a significant proportion of the enterprise is undertaken for the purposes of growing commercial quantities of cane sugar, and the Commission has determined that there are special reasons why the farm enterprise should be treated as a sugarcane farm enterprise.
For the full definition, refer to subsection 5PAA(1).