New South Wales Consolidated Acts

DUTIES ACT 1997 - SECT 274

274 Transfer of certain business property between family members

(1) Duty under this Act is not chargeable in relation to a transfer of land used for primary production, together with other property that is an integral part of the business of primary production, if the Chief Commissioner is satisfied of all the matters specified in subsections (2)-(4).

(2) Firstly, the Chief Commissioner must be satisfied that the transferor, or the person directing the transferor, is a member of the family of--

(a) the transferee, or

(b) the person directing the transferee.

(3) Secondly, the Chief Commissioner must be satisfied that the land was, immediately before the transfer or the date of first execution of the instrument of transfer, land used for primary production in connection with a business carried on, whether alone or with others, by--

(a) the transferee, or a member of the family of the transferee, or

(b) the person directing the transferee, or a member of the family of the person directing the transferee.

(4) Thirdly, the Chief Commissioner must be satisfied that the business will continue to be carried on, whether alone or with others, by--

(a) the transferee, or

(b) the person directing the transferee.

(4A) For the purposes of this section, the
"person directing" a transferor or transferee is--

(a) for a transferor or transferee acting in the capacity of--

(i) executor of a deceased estate--the deceased person, or

(ii) trustee of a bare trust--a person who is a named beneficiary of the trust, or

(iii) trustee of a self managed superannuation fund--a person who is a member of the fund, or

(b) for a transferor or transferee acting in the capacity of trustee of a discretionary trust--a person or persons who are entitled, as takers in default of appointment, to not less than a 25% interest in the capital of the trust, being an entitlement--

(i) for a transferor--that existed for at least 3 years before the date of the transfer or that existed from the date of establishment of the trust, or

(ii) for a transferee--that exists for at least 3 years after the date of the transfer, or

(c) for a transferor or transferee acting in the capacity of trustee of a private unit trust scheme--a unit holder or unit holders in the unit trust scheme who hold the units beneficially and are entitled, as unit holders, to not less than 25% of the assets of the unit trust scheme on winding up, being an entitlement--

(i) for a transferor--that existed for at least 3 years before the date of the transfer or that existed from the date of establishment of the trust, or

(ii) for a transferee--that exists for at least 3 years after the date of the transfer, or

(d) for a transferor or transferee that is a proprietary limited company--a shareholder or shareholders in the company who--

(i) are beneficially entitled to the shares in the company, and

(ii) are entitled to vote at meetings of the company, and

(iii) are entitled as shareholders to not less than 25% of the assets of the company on winding up, being an entitlement--

(A) for a transferor--that existed for at least 3 years before the date of the transfer or that existed from the date of incorporation of the company, or

(B) for a transferee--that exists for at least 3 years after the date of the transfer.

(4B) For a transfer involving a proprietary limited company or unit trust scheme (a
"subsidiary entity" ) that is owned by another proprietary limited company or unit trust scheme (the
"parent entity" ), a person is taken to be a person directing the subsidiary entity if the Chief Commissioner is satisfied that, had the parent entity been the transferor or transferee, as the case requires, the person would be the person directing the parent entity under subsection (4A).

(5) Except as provided by subsections (4A) and (4B), there are no other cases in which a person is considered to be a person directing a transferor or transferee.

(5AA) A reference in this section to a business carried on by a person includes a reference to a business carried on by a company, or under a trust, that is controlled by the person.

(5A) This section does not apply if the transferee acquires the land concerned as a trustee.

(6) In this section--

"member" , of a transferee's family, means each of the following persons--

(a) the transferee's spouse,

(b) a parent of the transferee or the transferee's spouse,

(c) a grandparent of the transferee or the transferee's spouse,

(d) a brother, sister, nephew, niece, uncle or aunt of the transferee or the transferee's spouse,

(e) a child or grandchild of the transferee or the transferee's spouse,

(f) the spouse of anyone mentioned in paragraph (b), (c), (d) or (e).

"spouse" includes a former spouse, a de facto partner and a former de facto partner.

"transfer" of land includes the following--

(a) an agreement for the sale or transfer of the land,

(b) a lease of the land,

(c) a transfer or assignment of a lease or permit in relation to the land.

Note--: The Dictionary also defines
"transfer" to include an assignment and an exchange.

"transferee" includes lessee and assignee.

"transferor" includes lessor and assignor.

Note :
"Land used for primary production" is defined in the Dictionary.