1121A

Effect of certain liabilities on value of assets used in primary production

In force

(1)

For the purposes of working out the value of a person’s assets under this Act, if:

(a)

the person is:

(i)

a primary producer; or

(ii)

a family member of a primary producer; and

(b)

the person has assets (including real property) that are, in the Secretary’s opinion, used for the purposes of carrying on that primary production; and

(c)

the person also has liabilities that are, in the Secretary’s opinion, related to the carrying on of the primary production;

then:

(d)

section 1121 does not apply in relation to the assets referred to in paragraph (b); and

(e)

those assets are taken to be a single asset (in this section called the primary production asset); and

(f)

the value of that single asset is worked out under subsection (2).

Note:

For family member see subsection 23(1).

(2)

The value of a person’s primary production asset is worked out in the following way:

Method statement

Step 1. Add together the value of the assets referred to in paragraph (1)(b): the result is called the unencumbered value.

Step 2. Add together the value of the liabilities referred to in paragraph (1)(c): the result is called the total liability.

Step 3. Take the total liability away from the unencumbered value: the result is the value of the person’s primary production asset.

(3)

If the result under Step 3 of the Method statement is less than nil, the value of the primary production asset is taken to be nil.

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