A farmer holds a qualifying interest in a farm if they:

• have legal ownership of the farm land;
• hold a pastoral lease over the farm land;
• hold an equitable interest in general law land which is mortgaged; or
• are a sharefarmer in a private company that owns or holds a pastoral lease over the farm land.

Refer to section 5P(5) of the VEA for the full definition.

According to subsection 5P(1) of the VEA, a farm means any land that is used:

• For the purposes of a farm enterprise; or
• In connection with a farm enterprise.

For RAFS and RASF, a farmer or sugarcane farmer needs to derive a significant part of their income from their relevant farming enterprise in order to fulfil the requirements for a qualifying farmer and qualifying sugarcane farmer respectively.

When determining whether a person derived a significant part of their income from farming or sugarcane farming, gross (before expenses) income figures should be used. The general rule will be that at least half of the person's income was involved. The entire period is examined as a whole.

An indication of a family member's major source of income can be obtained from the farmer's tax return or the farm or sugarcane farm business tax return.

In considering whether a 'significant part' of the person's labour was related to the farm, the general rule will be that at least half of the person's working hours were involved. The entire period is examined as a whole.

RAFS example: A farmer purchased his farm in 1982. From 1993 to 1995 the farmer worked full time in off-farm employment, but continued to work on the farm after work and on weekends, and continued to receive a small income from his farm. For the remainder of the period, all of his labour was contributed to the farm. The farmer retired in 1998 and gifted the farm to his daughter. The farmer is a qualifying farmer because he has continuously owned a farm for at least 15 years, and during that time the significant part of his income, labour and capital was related to his farm.

RASF example: A sugarcane farmer purchased his sugarcane farm in 1988. From 1999 to 2001 the farmer worked full time in off-farm employment, but continued to work on the sugarcane farm after work and on weekends, and continued to receive a small income from his sugarcane farm. For the remainder of the period, all of his labour was contributed to the sugarcane farm. The sugarcane farmer retired in August 2004 and gifted the sugarcane farm to his daughter. The sugarcane farmer is a qualifying sugarcane farmer because he has continuously owned a sugarcane farm for at least 15 years, and during that time the significant part of his income, labour and capital was related to his sugarcane farm.