Primary production aggregation for private trusts and private companies 043-04100030

From 1 January 2002, private trusts and private companies are assessed for the income and assets of the entity. The income and assets will be attributed proportionately to the controller(s) of the entity. If a customer is the controller, or one of the controllers of an entity that is carrying out primary production business activities or the entity has primary production assets used by another business controlled by the customer, the net primary production assets or liabilities, or a proportion thereof, of the entity will be attributed to the customer. For more information, see Assessment of assets for trusts and companies.

If after taking into consideration the primary production assets and liabilities it is found that the company or trust has net liabilities rather than net assets, the value of the deficit attributable to the customer will be accepted as the customer's personal primary production liability.

Note: adjustments for any market value of assets and any disallowed liabilities will be made before determining the customer's interest in the company or trust.

Any liability will be aggregated (combined) with other primary production liabilities attributed to or owned by the customer. The same principal applies if there is a net primary production asset attribution.

Apportionment is used where a loan relates to both primary production assets and non-primary production assets, for example, the loan has been obtained to purchase both 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.

Where a loan is used to purchase 100% of primary production assets (for example, used to 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 to be a 100% primary production liability.