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When the time comes for farmers to retire, it is common for the farm to be kept in the family. The stamp duty payable on the transfer of the farm to the kids has been an impediment to this occurring in years gone by. In recognition of the importance of the role primary production has in the economy, the Queensland State Government has given stamp duty concessions for intergenerational transfers of farmland and farm business assets.
Presently, stamp duty is calculated based on a scale. Where the asset being transferred has a value of $1million or more, the rate is $38,025 plus $5.75 for each $100, or part of $100, over $1,000,000. For example, for a $5million asset, the stamp duty payable will be:
$38,025 + $230,000 = $268,025.00.
Thankfully for farmers, a concession applies which allows parents to pass the farm onto the kids without the duty having to be paid.
Prior to 1 July 2016, to qualify for the concession, the transfer of the farm had to be made as a gift. The change to the law which is now in effect allows for the transfer of the farm land and business within the family (whether or not it is by way of gift or sale for a price) without the imposition of stamp duty.
As with all concessions, there is no guarantee that it is here to stay. If a transfer of the farm within the family is part of your succession plan, it is worth revisiting the plan now to ensure you are taking advantage of the concession while it is available.
Before rushing into a transfer, you need to ensure that the terms meet the criteria for the exemption. There are also taxation considerations. My recommendation is to seek legal and accounting advice so that all bases are covered before proceeding. As with all matters, I will have an initial meeting or teleconference with you free of charge to allow you to weigh up your options.
Tom O'Shea | Partner | +61 7 3238 0605 | email@example.com