LAW AMENDMENTS TO HELP STRUGGLING FARMERS
Written on the 15 July 2016
PRIMARY producers will benefit from legislation passed by both the Queensland and federal governments, which came into effect 1 July.
The federal farm management deposit scheme has been amended, while Queensland has relaxed primary production duties.
The maximum amount allowed in a farm management deposit has increased from $400,000 to $800,000, but it must be held for at least 12 months. The income is taxable when money is withdrawn from the scheme.
Principal of Brisbane-based law firm Creevey Russell, Dan Creevey, said changes will 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," Creevey said.
Producers affected by a lack of rain for six months will be able to access the farm management deposit without losing the claimed tax deduction, if the deposits have been held for at least six months.
The Queensland parliament's vote to relax primary production duties from July 1, 2016, will also benefit producers.
"Amendments brought in by the Duties and Other Legislation Amendment Act 2016 have removed the requirement for the transfer of dutiable property used to carry on particular family businesses of primary production by way of gift," Creevey 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 significant inhibiting factor preventing many families from attending to proper business succession and estate planning."