November 29, 2016

Family transfers & primary production – New duty concessions

Intergenerational Transfers

Intergenerational Transfers Affected by Changes to the Duties Act 2001 (Qld)

New transfer duty concessions will now be available for transferees, particularly in relation to intergenerational transfers of prescribed and primary production businesses, pursuant to the Queensland Government’s welcomed changes to the Duties Act 2001 (Qld) .

How does this affect eligibility?

Transfer duty concessions are now available for primary production businesses or prescribed businesses. A primary production business is a business of agriculture, pasturage or dairy farming. A prescribed business solely involves one of the following business activities:
- excavating and earthmoving
- picture framing
- gunsmithing
- locksmithing
- manufacturing
- processing and packaging
- printing and publishing
- boot and shoe repairing
- retailing and wholesaling (whether or not it involves repairing or installing goods sold)
- upholstering
- undertaking or funeral directing
- other (being beauty salon or barber shop, bus service, cinema, crematorium, engineering workshop, laundry or laundrette, newsagency, travel agency or real estate agency, repair and service workshop, rental business, restaurant or café, service station, sports complex or gymnasium, warehouse or bulk storage complex).

Concessions

If eligible, no transfer duty is payable if the business property carries on a primary production business. If residential land, which is adjacent to the land used to carry on a primary production business, is transferred under the same transaction then no transfer duty is payable. Unfortunately, transfer duty on water allocations still must be paid.
If the business is a prescribed business, transfer duty rate must be applied to any purchase. Here, transfer duty is payable on business property worth $500,000 or more. For example, if a property is worth $750,000, duty is payable on $250,000 (being the amount above $500,000). A list of transfer duty rates is available at the Queensland Government website.

Requirements

To qualify for a concession, the following is required:
1. the Transferor conducts the business and must be:
a. for a primary production business, a defined relative (spouse, siblings and children) of the transferee; or
b. for a prescribed business, an ancestor of the transferee.
2. the Transferee intends to carry on the business;
3. the Transferee carries on the business after the transfer;
4. the Transferee does not acquire the business property as an agent for another individual or as trustee; and
5. if a prescribed business, the transfer must occur by way of gift.

Takeaway – What does this mean for you?

When it comes to intergenerational transfers, questions of eligibility requirements and concessions are complicated. Forms and documents required to satisfy the Office of State Revenue can be daunting, too. If you need advice regarding transfer duty exemptions, please contact the experts at Rouse Lawyers. We have teams who specialize in property law, estate planning and taxation.

Need help and advice about intergenerational transfer duties? Get expert legal and taxation advice at Rouse Lawyers today.

Duties and Other Legislation Amendment Bill 2016 on 17 June 2016