Intergenerational Transfers
An intergenerational transfer is the passing of ownership in rural land from one member of the family to another. To encourage the younger generation to stay on the farm and work the land, the ACT and NSW Governments have allowed in certain instances, for these transfers between family members to be exempt from duties. This provides farming families with financial incentives to plan for the future of the farm and the family.
In order for the transfer to be exempt from duties the land being transferred must be rural in nature and be used for the purposes of primary production. Primary production in this instance is considered as the following:
- The cultivation of the land for the purposes of selling the produce of the cultivation
- The maintenance of animals or poultry on the land for the purpose of selling them or their natural increase or bodily produce
- Keeping of bees on the land for the purpose of selling their honey
- A commercial plant nursery, but not including a nursery at which the principle cultivation is the maintenance of plants pending their sale to the general public
- The propagation for sale of mushrooms, orchids or flowers or
- Aquaculture
Other requirements for the transfer of rural land to be exempt are that the land has to have been used for primary production by the transferor immediately before the transaction and that the land will continue to be used for primary production by the recipient after the transfer.
FAQ's
Transactions that will be eligible for duty exemptions include:
- A transfer of land
- An agreement for the sale or transfer of land
- A lease of land
- A transfer or assignment of a lease or permit in respect of land or
- A transfer of shares in a share management fishery
The person who is receiving ownership of the land through the transfer must be a family descendant of the person transferring the land. Descendants who are eligible for exemption in these transfers include:
- a child or step child
- a grandchild
- a brother or sister
- a brother-in-law or sister-in-law
- a niece or nephew
or the spouse of any of them
If the original owner of the land is not an individual but rather a Limited Company or Trust then the following eligibility criteria applies:
| Transferor, Lessor, Assignor | Transferee, Lessee, Assignee |
| Executor of a deceased estate | Descendant of the deceased. |
| Proprietary limited company | Descendant of a shareholder or shareholders:
|
| Trustee of a bare trust | Descendant of a named beneficiary of the trust. |
| Trustee of a discretionary trust | Descendant of a person or persons who are entitled (as takers in default of appointment) to a 25% interest in the capital of the trust fund, being an entitlement which existed for at least 3 years prior to the date of transfer or lease, or from the date of establishment of the trust. |
| Trustee of a private unit trust | Descendant of a unitholder or unitholders:
|
So if you are a primary producer and looking to secure the future of your farm please contact one of our friendly qualified lawyers who can assist you every step of the way.
