Duty, super and succession

Transfer or “Stamp Duty”

Like CGT, Stamp Duty imposts attach to the transfer of assets or “dutiable property”, but duty is imposed regardless of acquisition date.

Stamp Duty is also not imposed on ownership transfers that are directed by the administration of an individual’s estate, making it another reason to cite for those tempted to avoid the issue of farming succession. But the potential impost of Stamp Duty should not be a roadblock to attaining the so many other advantages of developing succession pathways during one’s lifetime.

This, too, is recognised by state governments, providing exemptions to Stamp Duty for intergenerational transfer of assets to what is now a wide definition of eligible family recipients regardless of gifting being present. The structure of business operations, together with current as well as intended asset ownership can impact on exemption eligibility though, so, in this regard, working closely with legal professionals to navigate these concessions in development of a succession strategy is essential.

Superannuation – Not an investment, but merely an investment structure!

In a planning process that establishes independent, financial security for the exiting generation as the priority, taking advantage of the significant taxation concessions associated with participating in this investment environment cannot be overlooked. To ensure ongoing “retirement” income, the amount of capital potentially required to be funded by farming successors, will be significantly less where full utilisation of the opportunities to place funds for investment within superannuation structures, is taken.

Combining with Small Business CGT eligibility, lifetime limits on access to superannuation can be dramatically increased for exiting parties. But through a lack of consideration or timely action this window of opportunity can be found to have closed behind the ill-advised or unprepared. Accordingly, this limited window for advantage dictates that the ideal timeframe within which succession is to be affected, is before exiting individuals have, in reality, retired and before having reached age 75.

Final succession planning considerations

The above is very much a simplified overview of the regulatory imposts impacting succession planning and much of the detail surrounding eligibility for concessions, requires careful exploration.

The lesson is, do not defer committing to the process of succession because of what may seem on the surface to be ineligibility. The provisions surrounding the available concessions and exemptions are very complex. Until you have an expert in the field review your family’s situation, combined with looking at their objectives and what is trying to be achieved, you cannot be secure in knowing every advantage has been gained.

How does Carrick Aland help?

Succession planning done properly can be an intense but rewarding process. In our experience, it can take as long as 18 months from the first meetings to signing off agreements and transferring business assets to successors. Once a plan is signed off, it can then take many years to implement for full financial advantage.

Don’t be disheartened. Carrick Aland’s succession planning team can provide initial guidance, right through to family meeting facilitation and full project management services, with complete flexibility around the amount of assistance that you and your family may require.

Enjoyed reading our succession article series?

You can revisit any of the succession topics we’ve covered in this series by clicking over to the succession section of our website: carrickaland.com.au/category/caconnect/succession/.

By proactively planning for the handover of your farm business and related assets, contemplating the future needs of family group members, borrowings and appropriate entities, be prepared for the unexpected when it happens and gain certainty for the next generation wanting to take over the family business. Wayne Turner understands the difficulty in starting those conversations and can have you and your family turn those into a positive and constructive succession planning process. Call Wayne on 07 4669 9800.