Primary production aggregation for sole traders 043-04100010

As a sole trader's business is not a separate legal entity to the person, the assets and liabilities of the business are the assets and liabilities of the customer. A sole trader lodges an individual tax return and the associated financial statements. The balance sheet shows the assets and liabilities of the business.

A primary production sole trader may also have an attributable interest in a private company or private trust engaged in primary production. From 1 January 2002, any net primary production asset or net primary production liability attributed from a private company or private trust to the customer, must be included in the overall aggregation calculation to provide the most favourable result for the customer.

This means if the customer has an interest in one or more business structures involved in primary production, the assets and related liabilities need to be taken into consideration.

Loans from sole traders to their own attributable primary production private companies or trusts, are not primary production assets.

A sole trader's borrowings from their primary production private companies or trusts are not primary production liabilities, unless proof of the primary production purpose of the borrowings can be demonstrated (for example, the funds are used to purchase a primary production asset such as a tractor).

If a loan is used to purchase 100% of primary production assets (for example, buy a tractor) and the loan is secured over primary production and non-primary production assets (for example, the family home), the liability is still considered a 100% primary production liability.

Apportionment is used if a loan relates to both primary production assets and non-primary production assets. An example is, the loan was obtained to purchase a farm and the customer's principal home. Only the portion of the loan relating to the primary production asset is used in the aggregation calculation.

Refer sole trader aggregation assessments to a Complex Assessment Officer (CAO) to do, see  Identifying and making suitable referrals to the Complex Assessment Officer (CAO).