FMDs & Stamp Duty Exemptions Estate & Succession Planning

It is pleasing to see that both the Federal and Queensland Governments have introduced measures to assist rural clients with tax and stamp duty, to be effective from 1 July 2016.

Strengthening of the Farm Management Deposits Scheme (FMDs)

As you are no doubt aware, increasing the limits on FMDs by doubling them from $400,000 to $800,000 and the use of same as offsets against other farm business loans will be a valuable tax planning and estate planning tool for rural clients

Strengthening the Stamp Duty Exemptions for inter-family business property transactions for Rural Families

The Queensland government has amended the Duties Act to exempt certain inter-family transaction from Stamp Duty even when monetary consideration passes or when liabilities are assumed. Prior to 1 July, the exemption was only available for that part of the transaction that was a gift by the transferor to the transferee. So with the changes, provided all of the conditions of the legislation are satisfied, there will be stamp duty exemption on transfers of rural properties and rural businesses (stock and plant) even when the relative acquiring the property is paying for it or taking over the debt of the disposer (transferor). The exemption is not restricted to transactions between parents and children. The definition of ‘defined relative’ is very wide and will give stamp duty relief to a much wider group of family members e.g. transactions between siblings; uncle/aunt – nephew/nieces etc.

Advice will need to be obtained to assess stamp duty exemption for each proposed family transaction to make sure the exemption applies before embarking on a deal and signing documents.

Both of the above legislative changes are of significant benefit to rural clients with their tax and succession planning.

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