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Boost for Farming Families

Farming families to benefit from expansion to Stamp Duty Exemption

By Bill Thompson – Solicitor-Director, Succession Planning

12 July 2017

In a boost for farming families, the New South Wales Government recently expanded the Stamp Duty Exemption available to farmers transferring farmlands used for primary production between family members.

The Intergenerational Farming Transfer Stamp Duty Exemption, under section 274 of the Duties Act NSW, was extended on 11 April 2017 to include certain transfers of farmlands owned by a Self-Managed Super Fund (SMSF).

Commins Hendriks assisted the Rural Issues Committee of The Law Society of New South Wales to lobby the Government and politicians to introduce the Stamp Duty Exemption in 1994.  Over the past two decades, we have continued to be involved in lobbying for further broaden the scope of the Exemption. These ongoing efforts have proved successful with the Exemption expanded numerous times since 1994.

This new legislation (section 274(f) and (5AA) of the Duties Act NSW now puts transfers from SMSFs on an equal footing with transfers from other Trust Funds. The amendment provides that in the case of a transferor acting in the capacity of trustee of a SMSF, a person who is a member of the SMSF will be characterized as the person directing the transferor.

To be eligible of the Intergenerational Farming Transfer Stamp Duty Exemption, the following is required:

  • The Transferor or person directing the transferor (person or entity transferring the land) is a member of the familyof the Transferee (person or entity to receive the land). A member of the family means:
    • The transferee’s spouse
    • a parent of the transferee or the transferee’s spouse
    • a grandparent of the transferee or the transferee’s spouse
    • a brother, sister, nephew, niece, uncle or aunt of the transferee or the transferee’s spouse
    • a child or grandchild of the transferee or the transferee’s spouse,
      • the spouse of anyone mentioned above.
  • The land must be used for primary production in connection with a business carried on by the transferee or by a member of the family of the transferee – whether alone or with others – immediately before the transaction or the date of the first execution of the relevant document; and,
  • The primary production business is to continue to be carried on by the transferee, lessee or assignee – whether alone or with others.

Our knowledgeable and friendly team at Commins Hendriks can provide you with advice or assistance in relation to the Intergenerational Stamp Duty Exemption. Getting it right can save you a substantial amount of money. One matter we handled for the transfer from a SMSF to a son and his wife, where the 148 hectares of farmlands was valued (market appraisal) at $457.150.00, the Stamp Duty saving was $16,084.00.

We encourage you to speak to one of our specialist staff to discuss what these changes may mean for you, taking into consideration your particular circumstances.

For more details and assistance, please contact us on 1800 643 779.