How the value of the sugarcane farm enterprise is assessed
All primary production assets and liabilities are aggregated in order to calculate the net value of the sugarcane farm enterprise. This includes the net value of the:
- house and other buildings
- land
- capital improvement
- machinery
- produce (sugarcane).
Example assessment of sugarcane farm value
If a sugarcane farmer owned a $700,000 sugarcane farm with a $250,000 mortgage, for the purposes of RASF the value of the farm is $450,000. Liabilities taken out for non-farm purposes (eg holiday home) cannot be deducted from the value of the farm.
Value of home and curtilage may have been excluded
For RASF purposes, the value of the home and curtilage is excluded from the sugarcane farm value where the sugarcane farmer retains a life interest, freehold estate or leasehold interest in their principal home on the sugarcane farm.
Value of sugarcane farm partnerships
In cases where a sugarcane farmer has an interest in a sugarcane farm partnership, the total value of the combined sugarcane farm enterprise can not exceed $500,000.
Example assessment of sugarcane farm value - partnership
Where a sugarcane farm enterprise valued at $700,000 is owned by two brothers, each with shares of $350,000, the retiring sugarcane farmer cannot take advantage of RASF since the total value of the combined sugarcane farm enterprise exceeds $500,000.
Valuation requirements
A valuation of the sugarcane farm land and other sugarcane farming assets may be required, for example, if the sugarcane farmer's estimate appeared understated, or where the value of these assets was close to the $500,000 limit.
Value of sugarcane farm owned by trust
Where a person's sugarcane farm(s) and relevant sugarcane farm assets are held within a trust, the usual rules regarding assessment of designated private trusts do not apply. It is not the value of the sugarcane farmer's interest in the trust that is to be valued, but rather the value of the sugarcane farm and sugarcane farm assets in which the sugarcane farmer has an eligible interest.