Tony Cahill, Legal Author and Commentator
Original content authored by John Boag, Director, Everingham Solomons
Peter Moran, Director, Donaldson Trumble Legal (Vic)
Luckbir Singh, Partner, MacDonnells Law (Qld)
Gary Thomas, Partner, Tottle Partners (WA)
Philip Page, Partner, Mellor Olsson (SA)
Tim Tierney, Principal, Tierney Law (Tas)
Currently updated by Lyn Bennett, Consultant, Minter Ellison (NT)
Originally authored by Leon Loganathan, Managing Partner, Ward Keller Lawyers (NT)
Christine Murray, Partner, Meyer Vandenberg Lawyers (ACT)
Introduction
No attempt has been made to comment on the general taxation issues in this subtopic. Rather, the focus is on taxation issues that practitioners are likely to come across in their dealings with rural land. For general taxation issues as they relate to property law, see the Taxation and revenue topic.
The principal revenue issues for rural practitioners, and their timing, can be grouped into three main categories based on the stage of the transaction. These are revenue issues arising:
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on the acquisition of the land;
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at the time of its disposal; and
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subsequent to its disposal.
Stamp duty, GST and CGT
When land is purchased, stamp duty is payable. Caution needs to be exercised at this time to ensure that the purchaser does not have the obligation of paying, or reimbursing, any goods and services tax (GST) which the seller of the land may contractually impose.
When the farming enterprise is sold, the seller needs to consider his or her obligations under the GST legislation. With the sale proceeds in hand, there is a need to consider obligations under taxation legislation regarding capital gains tax (CGT). See CGT.
See Stamp duty and GST.
Other revenue issues
There are other revenue issues which arise on a frequent and ongoing basis for the landholder. For example:
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local government rates and charges;
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LLS (Local Land Services) rates and charges;
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State Water charges; and
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Crown lands fees and charges.
Tax structuring
The subject of taxation issues relating to the carrying on of an agricultural business is too complex to be dealt with in this subtopic. Similarly, the estate and succession planning issues which will present themselves to most farmers and their families is a subject which can only briefly be discussed. See Intergenerational transfer of farmland. However, some issues need to be considered at the commencement of a farming enterprise which will overcome difficulties at a later date. Suffice to say, however, that the relevant advice from an accountant, at the acquisition stage, will be of invaluable assistance.
For further information, see the Australian Taxation Office (ATO) website.