The same principles used to determine whether a person carries on farming operations apply to game farmers. The test for this purpose is a subjective one, that is, one based on the taxpayer’s intention.
Income from the sale of game, game meat, carcasses and skins and fees related to hunting constitute farming income. However, income from accommodation, catering and admission charges is not farming income. This will be relevant when applying the ring-fencing provisions of paragraph 8 to game livestock. Game viewing fees may or may not constitute farming income depending on the facts and circumstances of the particular case.
The rules governing the deduction of expenditure, including capital development expenditure, are similar to those which apply to normal farming operations.
A farmer is required to bring to account the value of game livestock in opening and closing stock. No standard values have been prescribed by regulation for game livestock, but the Commissioner accepts that game livestock may be allocated a standard value of nil. Game livestock which is acquired by donation or inheritance is included in opening stock in the year of acquisition at market value under paragraph 4.
The deduction under section 11(a) for the cost of livestock is ring-fenced under paragraph 8, while an assessed loss or balance of assessed loss from farming is subject to potential ring-fencing under section 20A.
A farmer who ceases to carry on game-farming operations must generally continue to deal with any game livestock under the First Schedule.
Special rules apply for income tax and CGT purposes upon the death or sequestration of a farmer.