FARM WEEKLY ARTICLES

TRUST PURCHASES AND DECLARATION OF TRUST

TRUST PURCHASES AND DECLARATION OF TRUST

Many farming clients choose to buy their farming properties in a newly formed or an established Family Discretionary Trust.  When buying in this format it is extremely important to get the correct wording on the Offer and Acceptance document.  It needs to be correct right from the first version of the Offer and Acceptance as it is difficult to change once the contract is signed.

It is important for the Trustee details to be exactly correct, whether the Trustee is a personal trustee or whether there is a company acting as Trustee of the trust.  It is also vital that the Trust name is correct.

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GST ON FARMLAND SALES

GST ON FARMLAND SALES

The Goods and Services Tax (“GST”) is a broad based tax of 10% on the supply of most goods, services and other items sold or consumed in Australia unless they are GST-free or input taxed.

A contract for the sale of farmland should include a reference to the liability or otherwise for collection of GST.  Failure to refer to the GST component of a sale could see the seller paying GST from the proceeds of the sale rather than having collected it in addition to the sale price. For the buyer it could affect the amount of duty assessed and payable.

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FARMLAND: LEASE OR BUY?

FARMLAND: LEASE OR BUY?

You may have the opportunity of making a choice between buying the farm next door or leasing it?

While we cannot advise you on the prudence of your particular financial decision, we can provide you with some facts which may help you and your financial advisers make the decision on which option suits your particular enterprise best.

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TRANSFER DUTY

TRANSFER DUTY

Transfer duty may be described as a general revenue tax, which is imposed under the Duties Act 2008 (‘the Act’) on various dutiable transactions (whether documented or not) including transfers of real estate and certain business assets.

Transfer duty is imposed on dutiable transactions. The Act specifies a list of the types of transactions, together with a list of dutiable property that may be the subject of duty.

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WHO IS THE BUYER – PERSONS, TRUST OR COMPANY?

WHO IS THE BUYER – PERSONS, TRUST OR COMPANY?

It seems a simple question.  But far too regularly, when people enter into a contract for sale, the wrong Buyer has been documented and this simple and avoidable error can be very costly to rectify.  To give an indication to the additional costs; we mean extra, sometimes double, Transfer Duty.

So how do you avoid documenting the wrong Buyer and incurring those additional costs?

The most important thing to do is to not rush into a contract for sale without giving careful thought to the transaction.

The three most likely forms a Buyer will take are: Read More