Income Tax Amendment Act (No. 2) 1987

This commentary item was published in Public Information Bulletin Volume 163, May 1987

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Exemption of All Farmland from the Clawback Provisions of Section 129

The Under-Secretary to the Minister of Finance, Mr Trevor de Cleene confirmed today (24.4.87) that all sales of farmland made after 12 December 1985 will be exempted from the interest and farm development expenditure recovery provisions of section 129 of the Income Tax Act.

Mr de Cleene said that there had been some confusion on the issue. The Economic Statement of 12 December 1985 announced that sales of agricultural, horticultural, aquacultural and forestry land would be exempt from section 129 where such sales were made after that date. However, it was also announced that sales of rental and commercial property would remain subject to section 129 for the time being.

Mr de Cleene explained that it was intended that all sales of farm land would be exempted from the "clawback" provisions irrespective of the legal ownership of the land. This would extend to farm land which may be leased land such as land held by family trusts and companies.

A further amendment will be made to the Tax Act this year to give effect to the Government's intention, said Mr de Cleene.