Tax Tip 297: Victorian Duty Exemption for Transfer of Farming Land to a Trust

Discussion in 'Accounting & Tax' started by Terry_w, 5th Aug, 2020.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If you own a farm in VIC you are in luck because it is one of the few states which will allow for the transfer of farming land without stamp duty where it is being moved into the hands of a trustee of a discretionary trust which has relatives of the transferor as capital beneficiaries.

    The exemption is found in section 56 of the Duties Act 2000 (VIC)

    DUTIES ACT 2000 - SECT 56 Transfers of farms to relatives or charities


    The farming land must qualify as ‘primary production’ land.


    Note that any old standard discretionary trust deed won’t work as the capital beneficiaries will need to be restricted to the relatives.


    CGT would also need to be considered as this would be a CGT event.
     
    Terry_w, 5th Aug, 2020
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  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Its similiar to the SMSF Business real property transfer exemption in NSW. OSR NSW require some special rules in the deed and asset segregation to ensure that ONLY the persons who were the former owner/s have a smsf interest in that land. No other member.

    Farming land may satisfy small business CGT exemptions in some cases.
     
    Paul@PAS, 5th Aug, 2020
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