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Aug 07, 2018 / News

Agribusiness / Taxation

Stamp Duty: Family Farm Exemption

What is the Family Farm Exemption?

The Family Farm Exemption allows landowners in South Australia (who meet the eligibility criteria) to transfer land used wholly or mainly for the business of primary production between certain relatives and/ or their trustees without the imposition of stamp duty. This legislation was introduced to encourage younger family members to stay on the farm and continue running the business. 

While stamp duty relief may be available on eligible Family Farm transfers, LTO transfer fees will still apply.

The Australian Government is not responsible for the governance of stamp duty. It is legislated by each state and territory and therefore it is important to highlight that the laws, with respect to stamp duty exemptions, differ between each jurisdiction.  

What types of Primary Production are covered? 

For the purpose of the exemption, the business of primary production in South Australia generally includes:

Agriculture, pasturage, horticulture, viticulture, apiculture, poultry farming, dairy farming, forestry or any other business consisting of the cultivation of soils, the gathering in of crops, the rearing of livestock or the propagation and harvesting of fish or other aquatic organisms. 

Who is it available to? 

The Family Farm Exemption is generally made available on a transfer between the landowner and their relatives, which can include the following conveyances:

  • Natural person to a natural person;
  • Natural person to a trustee;
  • Trustee to a natural person, and;
  • Trustee to a trustee.

The following are some examples of relative (family member) relationships which include (but are not limited to):

  • Grandparent and child or grandchild; 
  • Child and parent or grandparent;
  • Brother and sister (including in-laws); 
  • Spouses or a spouse of any person referred to above. A person is a spouse of another person if they are legally married or domestic partners.

Note that in some jurisdictions (including South Australia) the relative is required to have worked in the landowner’s business. Refer below for further details.

What are the eligibility criteria?

  • The land must be wholly or mainly used for the business of primary production and not less than 0.8 hectares in size; 
  • A business relationship with respect to use of the land must exist between the transferor and transferee for at least 12 months immediately before the date of the conveyance;
  • The sole or main business of the transferor (immediately before the conveyance of the land) is primary production, and;
  • The transfer does not arise as a result of an arrangement or a scheme devised for the principal purpose of taking advantage of the exemption.

What if the transferor/ transferee is a Trust or Superannuation Fund?

If a transferor or transferee is a trustee of a Family Discretionary Trust, the beneficiaries of the trust must be limited to natural persons who are relatives and part of a particular family group.

If a transferor or transferee is a trustee of a Unit Trust, the unit holders of the unit trust must be limited to natural persons who are relatives and part of a particular family group.

If a transferor or transferee is a trustee of a Superannuation Fund, the members of the fund must be limited to natural persons who are relatives and part of a particular family group.

How can I apply?

Applicants must complete a statutory declaration form to be submitted at the time of conveyance and provide evidence to Revenue SA that the exemption criteria have been met.

How can Nexia Edwards Marshall help you?

If you require assistance in making an application or would like to discuss the exemption further, please contact George Papanicolaou or your Nexia Edwards Marshall Adviser.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.