By Jim Main -
Snapshot
- Confirm legal ownership of land early on and speak to your client’s accountant.
- Where land is treated as a partnership asset, each partner’s capital gains tax position must be considered.
- Don’t assume farmland is always goods and service tax free.
You were very pleased when Fred and Mary came to see you about selling their farm, Hopeton, to a solar farm developer for a great price. You were also pleased their accountant advised that, because they have owned the farm for more than 15 years, are retiring to the coast and they otherwise qualify for the small business concessions, the sale would be capital gains tax (‘CGT’) free.
When you asked, Fred said the business was run through a partnership with Mary and their son, Tony, and they planned a clearing sale when the sale of Hopeton was locked in. Tony wasn’t so happy about the sale but mum and dad promised to give him a fair swag of cash to start again, doing something — not sure what yet.
In no time at all you had the contract prepared, exchanged and settled. Fred and Mary were very happy.
