Senate Economics Legislation Committee, , 9:23:04 to 9:26:12
Clarification on how primary production income is treated under trust tax changes and the availability of rollover relief.
Topics: Agricultural productivity, Food security
Speakers: Jill Kitto, Senator Jacinta Nampijinpa Price, Laura Berger-Thomson, Senator Kerrynne Liddle, Hon Jane Hume
Sorry, I'm jumping around, but I just want to ask now, are sheep shearers, grain harvesters, crop dusters, and hay bailers exempt from this tax? Or are all of these farming businesses subject to the tax?
So primary primary production income is a long-standing definition in the income tax assessment act nineteen ninety-seven. Uh those definitions are not changing under the minimum tax uh on discretionary trusts measure. Um, so to the extent the situations that you've outlined are or are not covered, that would be governed by existing definitions.
Sell a door.
Sellad doors are generally not considered within the definition of primary production income.
Wow. So if I had a farm business or a farm study, they're also not going to be captured.
So I I would just add to that um from the ATO tax stats from 23-24. Um approximately 80% of businesses that have oh, sorry, of businesses that have primary production and non-primary production income, about 80% of that income is primary production income. So it it is a minority when it comes to the non-primary production income that would be subject to the minimum tax, and that is, as Ms. Berger Thomson said earlier, only if under the partial rollover that was announced uh as part of the exposure draft legislation that has been introduced into Parliament, um, there is that opportunity for those businesses to actually roll those non-primary production income producing assets into other structures and retain the primary production income producing assets in their discretionary trust if they choose to do so.
So just to build on that, like for example, they could roll that into a fixed fixed trust structure, which would not be subject to the minimum tax. That's what the rollover provision provides.
And how many businesses would be affected?
So we do have some statistics on um agricultural trusts. There are approximately 37,600 agricultural trusts that have some level of non-primary production income. Uh that was in the 23-24 income year from the ATO tax stats.
It's 10 past six. Do you have a final question?