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Set up or amend a farm trust

We will structure the farm so it can pass to the next generation without duty, and keep the exemption available.

South Australia lets farming land pass between family members without stamp duty. The exemption is one of the most valuable in the state, and it is also one of the most conditional. The land has to be used for a genuine primary production business, and the parties have to be within the prescribed family relationship. Where a trust holds the land, the trust itself has to satisfy the requirements. A structure that was set up without those conditions in mind can put the exemption out of reach years before anyone tries to use it.

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The exemption tested in advance

Whether a transfer qualifies is decided by the current structure, not by the intention behind it.

Time to fix what does not qualify

Several of the changes that restore eligibility have to be in place well before any transfer.

A claim the Commissioner will accept

The transfer is documented with the supporting evidence attached rather than requested afterwards.

What is a farm trust, and why does the structure decide the duty?

A farm trust holds farming land and the primary production business run on it. The point is usually to manage and pass down the property as one arrangement rather than split it between individuals. The structure matters because South Australia exempts transfers of farming land between family members from stamp duty. The exemption sits in the Stamp Duties Act 1923 (SA) (the Stamp Duties Act). Where the land sits in a trust, the exemption depends on the trust’s terms, its beneficiary class and how the business is actually conducted. A trust drafted for general asset protection will not automatically satisfy any of that.

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Does farming land really pass between family members without duty?

In South Australia it can. The Stamp Duties Act provides an exemption for transfers of land used for primary production between family members. It is conditional. The land, the relationship between the parties and, where a trust is involved, the trust’s own terms all have to satisfy the requirements.

Does the exemption still apply if the farm is in a trust?

It can, but the trust has to qualify. The beneficiary class has to include the family member receiving the land, and the trust’s terms have to meet the statutory requirements. A trust drafted for general asset protection often does not, which is why the deed should be read well before a transfer is planned.

What if someone else is farming the land now?

That is one of the most common problems. The land may no longer be used as the exemption requires. That happens where the business has moved to a lease or a share-farming arrangement outside the family. It is worth checking, because the arrangement can sometimes be restructured if there is enough time.

How far ahead should we start?

Earlier than most families do. Where the current structure already qualifies, the work is just documenting the transfer. Where it does not, some of the changes needed have to be in place well before a transfer. A few of them take years. A review now costs very little.

Check the exemption before you need it

Send us the trust deed and tell us who farms the land. We will tell you whether the family farm exemption is available and what would put it at risk.

The exemption is decided by how the farm is held, not by who wants it

The plan is for the farm to go to the next generation without being sold to pay tax on the transfer. South Australia allows exactly that, and the exemption is worth a great deal on land at current values. What is often not checked until too late is whether the way the land is currently held actually qualifies. Trust terms, the beneficiary class and who genuinely conducts the business all bear on it.

We will establish how the land is held and who actually conducts the farming business.
We will read the trust deed against the family members the land is meant to reach.
We will tell you whether a transfer would qualify for the family farm exemption today.
We will advise on the changes needed, and how far ahead they have to be made.
We will document the transfer so the exemption is claimed with the right evidence.

The farm is meant to stay in the family and nobody has tested how

The land has been in the family for a long time and the intention has always been that it stays there. One of the children farms it, or wants to. The property may sit in a trust set up decades ago, or in a mix of names that grew up over time. Everyone assumes the transfer can happen when the time comes. Nobody has checked what the duty position would be if it happened this year.

What's included in your farm trust advice

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A review of how the land and the business are currently held.
Assessment of the trust deed and beneficiary class against the intended recipients.
An opinion on whether the family farm exemption is presently available.
A list of the structural changes required, with the lead time for each.
Drafting of the transfer documents and the exemption claim.
Advice on the capital gains position alongside the duty position.

How a family loses an exemption it was entitled to

The family farm exemption is not lost in a single decision. It is lost by a structure that was put in place for other reasons and never tested against it.

The usual causes are structural rather than deliberate. A trust whose beneficiary class does not include the family member the land is meant to reach. Land held partly in a company, which is treated differently from land held by individuals or a qualifying trust. A business that has quietly stopped being conducted by the family and is now run under a lease or a share-farming arrangement with someone else.

Each of those can be worked with while there is time. None of them can be fixed on the day the transfer is meant to happen. Duty on farming land at current values is large enough that losing the exemption often means selling part of the farm to keep the rest.

From an assumption about succession to a transfer that qualifies

We start with how the land is held now and who actually farms it, because those two facts decide the exemption. That means reading the trust deed and checking the beneficiary class against the people the land is meant to reach. It also means looking at the business as it is really conducted.

Where the structure already qualifies, we say so and set out what would jeopardise it. Where it does not, we advise on what has to change and how long that takes. Some steps need to be in place well before a transfer. Then we document the transfer so the exemption is claimed correctly. The evidence the Commissioner of State Taxation will want is attached rather than requested later.

How we get the farm structure right

Test the exemption early, fix the structure, then document the transfer.

Establish the holding

We work out how the land is held and who genuinely conducts the farming business on it.

Test the exemption

We assess whether a transfer would qualify today, and identify anything that puts it at risk.

Fix and transfer

We advise on the changes needed, then document the transfer and the exemption claim.

The family farm exemption tested while there is still time to qualify

Farming families plan succession over decades and then find the legal work has to happen in a season. The land is usually worth far more than the business earns, which is what makes the duty question decisive rather than incidental.

Two of our lawyers are full members of the Society of Trust and Estate Practitioners. One of our lawyers is a Chartered Tax Advisor with The Tax Institute and has held that credential for 25 years. We advise on farm trusts and intergenerational transfers in South Australia, including whether the family farm exemption is available on the structure as it stands. Where it is not, we would rather tell you three years out than on the day the contract is due.

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Find out whether the exemption is available

Send us the trust deed and the titles, and tell us who farms the land. We will tell you whether a transfer would qualify, and what to change if it would not.

Speak to a lawyer 1300 654 590