Effective from 12 June 2014, the family business duty concessions under the Duties Act 2001 (Qld) for gifts of farm land and business assets which are used to carry on a primary conduction business has been expanded.
The family business concessions previously applied only in circumstances where there was a gift of dutiable property from an ancestor to a lineal descendant transferee (i.e. from a parent or grandparent of the transferee or the transferee’s spouse or a spouse of the parent or grandparent).
This approach was very restrictive for planning for the succession of the family business or farm land.
The expansion for primary production businesses
The amendments to the family business concessions in the Duties Act 2001 (Qld) widen the application of the concession to a wider range of family members as transferees.
The introduction of the term “defined relative” in the amended provisions extends the application of the concessions to include transferees who are:
- a parent of the person or the person’s spouse;
- a grandparent of the person or the person’s spouse;
- a person’s spouse;
- sibling/s of a person or the person’s spouse;
- aunts and uncles of a person or the person’s spouse;
- nieces and nephews of a person or the person’s spouse.
This means that where the transferor of the assets or the property is a “defined relative” of the transferee, the concessions may apply.
What hasn’t changed for primary production businesses?
When considering whether the concessions will apply, the following must still be kept in mind:
- the transaction must still be undertaken by way of gift;
- the requirement for the business to be carried on by certain people must still be met – although this has changed to provide that the business must be carried on by the “defined relative” who is the transferor or the person directing the transfer.
What this means for succession of family businesses
The expansion of the family business concession provides opportunities for family business succession planning where the primary production business and assets are kept within a wider family group.