All primary production assets and liabilities were aggregated in order to calculate the net value of the farm enterprise [2]. This included the net value of the:
If a farmer owned a $700,000 farm with a $250,000 mortgage, for the purposes of RAFS, the value of the farm was $450,000.
VEA?
For RAFS purposes, the value of the home and curtilage [2] was excluded from the farm [2] value where the farmer retained a life interest, freehold estate or leasehold interest in his or her principal home on the farm.
More ? [3]
In cases where a farmer has an interest in a farm partnership, the total value of the combined farm enterprise could not exceed $500,000.
Where a farm enterprise valued at $700,000 was owned by two brothers, each with shares of $350,000, the retiring farmer could not take advantage of RAFS since the total value of the combined farm enterprise exceeded $500,000.
An valuation conducted by DVA's licensed valuer of the farm land and other farming assets may have been required, for example, if the farmer's estimate appeared understated, or where the value of these assets was close to the $500,000 limit.
Where a person's farm(s) and relevant farm assets [2] were held within a trust structure, the usual rules regarding assessment of discretionary trusts did not apply. It was not the value of the farmer's interest in the trust that was to be valued, but rather the value of the farm and farm assets in which the farmer had a qualifying interest [2].
According to subsection 5P(1) [6] of the VEA, a farm enterprise means an enterprise carried on within any of the agricultural, horticultural, pastoral or aquacultural industries.
Curtilage is the land adjacent to the exempt principal home [2]. A certain amount of curtilage is disregarded for the assets test. [2]. The amount of curtilage that is exempt depends on whether the private land use test [2] described in section 5LA(3) of the VEA, or the extended land use test [2] described in section 5LA(4) of the VEA, is satisfied. Under the private land use test, up to two hectares on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.
According to subsection 5P(1) [6] of the VEA, a farm means any land that is used:
According to subsection 5P(1) of the VEA [6], a relevant farm asset in relation to a farm, means any livestock, crop, plant or equipment that is a produce of, or is used for the purposes of, the farm enterprise.
A farmer holds a qualifying interest in a farm [2] if they:
Refer to section 5P(5) of the VEA [6] for the full definition.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16184%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16184#tgt-cspol_part5_ftn149
[4] https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/55-retirement-assistance-farmers-scheme-rafs/557-valuation-farm-assets/retaining-life-interest
[5] https://clik.dva.gov.au/book/export/html/16184#ref-cspol_part5_ftn149
[6] http://clik.dva.gov.au/legislation-library