As part of the Rural Assistance Package announced in the Queensland's budget, primary producers can breathe a sigh of relief with the extension of the duty concession on intergenerational transfers of primary production property.

Primary production property includes land, plant & equipment and livestock primarily used to carry on a primary production business.

Previously the exemption was only available on the transfer of primary production property if it was by way of gift. However, if the transferee paid any consideration, or assumed any debt, than transfer duty was payable. In reality, this exemption was limited and added significant costs to succession planning, and in some cases, even forced a sale of the family business rather than pass it on.

However, from 1 July 2016, new legislation removes the requirement that a transfer of primary production property be by way of gift. This means if a family's primary production property is valued and purchased at $2 million, there is a transfer duty saving of $95,525. This is great news for Queensland primary producers wanting to transfer their property to the next generation of farmers.

Generally, to be eligible for the exemption the following conditions apply:

1. the transferor is a defined relative of the transferee
2. the business for which the business property is used, is carried on by the defined relative or ancestor, whether alone or with others,
3. the business is intended to be carried on by the transferee, whether alone or with others, and
4. the transferee does not acquire the business property as agent or nominee of another person

This Government initiative offers practical means to assist Queensland primary producers with family succession planning, and ultimately maximises the return on your investment.

Also announced under the Rural Assistance Package were grants of up to $2,500 for farmers to seek advice on mitigating climate risks, financial management, succession planning and multi-peril crop insurance.

If you are considering an intergenerational transfer of primary production property and wanting to take advantage of the new legislation, call Maxwell & Cameron Accountants today.