Legislation passed by both the Queensland and federal governments offers some important benefits for primary producers, according to leading legal firm Creevey Russell Lawyers.
Creevey Russell Principal Dan Creevey said changes introduced by federal parliament have allowed for a significant increase in farm management deposits, which help to protect farm income and cash flow during lean years.
“The farm management deposit scheme is a risk mitigation scheme which allows for primary producers to make tax deductable deposits – usually during the prosperous years – and then redraw them during the less prosperous times,” Mr Creevey said.
“From July 1, 2016, the maximum amount that can be held in a farm management deposit account has increased from $400,000 to $800,000. The deposit must be held for at least 12 months, and the income is taxable when the money is withdrawn from the scheme.
“In addition, if producers are affected by a rainfall deficiency for six consecutive months, and the deposits have been held for at least six months, they can access those deposits without losing the claimed tax deduction.”
Mr Creevey said another bonus for primary producers was the Queensland parliament voting to relax primary production duties from July 1, 2016.
“Amendments brought in by the Duties and Other Legislation Amendment Act 2016 have removed the need for the transfer of property to be by way of gift, if the property is used to carry on particular family businesses of primary production,” he said.
“Therefore, if the land or business assets are subject to a mortgage, the mortgage no longer needs to be discharged in order to obtain the duty exemption.
“We see this as a relaxation of a rule that has prevented many families from attending to proper business succession and estate planning.”
Creevey Russell and the team in Rural Property Law, have wide experience in advising primary producers, especially in relation to business succession and estate planning and understands the needs and desires of its rural clients.
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