All primary production assets and liabilities are aggregated in order to calculate the net value of the sugarcane farm enterprise [2]. This includes the net value of the:
If a sugarcane farmer owned a $700,000 sugarcane farm [2] 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.
More → [3]
VEA → [4]
For RASF purposes, the value of the home and curtilage [2] is excluded from the sugarcane farm value where the sugarcane farmer retains a life interest [2], freehold estate or leasehold interest in their principal home [2] on the sugarcane farm.
More → [5]
In cases where a sugarcane farmer has an interest in a sugarcane farm partnership [2], the total value of the combined sugarcane farm enterprise can not exceed $500,000.
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.
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.
Where a person's sugarcane farm(s) and relevant sugarcane farm assets [2] are held within a trust, the usual rules regarding assessment of designated private trusts [2] 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 [2].
More → [6]
According to subsection 5PAA(1) of the VEA [15], a sugarcane farm enterprise is a farm enterprise [2] where:
For the full definition, refer to subsection 5PAA(1).
According to subsection 5PAA(1) of the VEA [15], a sugarcane farm is a farm that is used predominantly for the purposes of a sugarcane farm enterprise [2].
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.
A life interest arises when a pensioner:
A life interest remains current until the pensioner:
The principal home has the meaning given by subsection 5LA(1) [15] of the VEA and subsection 5LA(2) [15] of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.
For the purposes of income and assets assessment, a partnership is the relationship which exists between people carrying on business in common, with a view to making a profit. A partnership agreement may be oral OR written. The business may be run:
The business is not a separate legal entity, which means that although the partnership lodges a tax return, the profit or income is assessable in the hands of the individual partners.
Each partner:
According to subsection 5PAA(1) of the VEA [15], relevant sugarcane farm assets in relation to a sugarcane farm [2], means any relevant farm asset or assets [2] that are a produce of, or are used for the purposes of, a sugarcane farm enterprise [2].
According to section 52ZZB of the VEA, a trust is a designated private trust unless:
the following conditions are satisfied, that is the trust:
units [2] are held by 50 or more persons, and
the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual/s to avoid Division 11A (means test of private companies and private trusts), section 52ZZB of the VEA or the equivalent section of the Social Security Act, or
VEA [17]
Eligible interest in a sugarcane farm
Subsection 5PAA(5) [15] VEA
Eligible interest in a relevant sugarcane farm asset
Subsection 5PAA(6) [15] VEA
VEA (go back) [18]
A sugarcane farmer holds an eligible interest in a sugarcane farm [2] if they:
Refer to subsection 5PAA(5) for the full definition.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16226%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16226#tgt-cspol_part5_ftn458
[4] https://clik.dva.gov.au/book/export/html/16226#tgt-cspol_part5_ftn459
[5] https://clik.dva.gov.au/book/export/html/16226#tgt-cspol_part5_ftn460
[6] https://clik.dva.gov.au/book/export/html/16226#tgt-cspol_part5_ftn461
[7] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1022-determining-value-asset/assessing-assets-encumbrances-and-loans
[8] https://clik.dva.gov.au/book/export/html/16226#ref-cspol_part5_ftn458
[9] clik://LEGIS/VEA/section 49R(5)
[10] https://clik.dva.gov.au/book/export/html/16226#ref-cspol_part5_ftn459
[11] https://clik.dva.gov.au/compensation-and-support-policy-library/part-5-income-support-allowances-and-benefits/510-retirement-assistance-sugarcane-farmers-scheme-rasf/5107-valuation-sugarcane-farm-assets/retaining-life-interest
[12] https://clik.dva.gov.au/book/export/html/16226#ref-cspol_part5_ftn460
[13] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts
[14] https://clik.dva.gov.au/book/export/html/16226#ref-cspol_part5_ftn461
[15] http://clik.dva.gov.au/legislation-library
[16] clikpopup://DEF/Excluded%20trust
[17] https://clik.dva.gov.au/book/export/html/16226#tgt-glossary_glossary_ftn3
[18] https://clik.dva.gov.au/book/export/html/16226#ref-glossary_glossary_ftn3