Revenue NSW updated Duties revenue ruling DUT 050 version 2 on the 30th May 2023 effective from the 19th May 2023.

This update was to clarify that the duties exemption for transfers of land used for primary production between family members extends to circumstances where the transferee is any of the following:

  • An executor of a deceased estate;
  • A trustee of a bare trust;
  • A trustee of a private unit trust scheme;Revenue NSW issues updated Duties revenue ruling on primary production land transfers between family members
  • A trustee of a discretionary (family) trust;
  • A trustee of a self-managed super fund; or
  • A proprietary limited company. (each a Permitted Entity)

The updates to DUT 050 version 2 bring Revenue NSW’s position into alignment with amendments to section 274 of the Duties Act 1997 (NSW) (Duties Act) that have been effective since 19 May 2022. 

Legislative Amendments and DUT 050

Broadly, section 274 of the Duties Act provides that duty is not chargeable in relation to a transfer of  land used for primary production where the transfer is between family members. Relevantly, a ‘transfer’ of land for the purposes of section 274  includes the following: 

(a) an assignment or exchange;            
(b) an agreement for the sale or transfer of the land;            
(c) a lease of the land; or            
(d) a transfer or assignment of a lease or permit in relation to the land.

Prior to the abovementioned amendments to section 274, which were effected by the State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 No. 16 (NSW), the exemption from duty could only apply where the transferee was an individual (natural person)

The amendments, which are now reflected in updated duties revenue ruling DUT 050 version 2, extend the exemption from duty to circumstances where the transferee is a Permitted Entity, subject to a post-transfer association test where the transferee is a proprietary limited company, or a trustee of a discretionary trust or of a private unit trust scheme, which requires that the family member directing the transferee must maintain a minimum 25% interest in the transferee for three years after the transfer, failing which a request for reassessment must be lodged via eDuties within 14 days of the interest reducing. 

Issues to Consider

If the transferor or transferee is not a Permitted Entity under section 274, such as a partnership, or ASIC signing on behalf of a deregistered company, the duty exemption cannot apply. If a liquidator is acting on behalf of the transferor, the exemption might apply. 

Having regard to the various requirements under section 274 in order for the duty exemption to apply, the following issues also warrant consideration:

  • The respective capacities of the transferor and transferee;Revenue Ruling DUT 050v2
  • Who will legally own the land or interest in the land being transferred;
  • Who carries on the relevant primary production business before, and who will carry on the business after the transfer;
  • Whether the business will be the same one both before and after the transfer of land;
  • Watch out if using a bare trust deed as the exemption for the deed is not contained within section 274; 
  • If the business is carried on in a partnership structure, is the partnership a pre-existing partnership prior to the land transfer or a new partnership (which might not satisfy the duty exemption)?  And 
  • What lease arrangements are currently in place on the primary production land.

If the parties to the transfer are individuals, the transfer can be stamped electronically through Electronic Duties Returns (EDR). In all other cases, the transfer and application for exemption should be sent to Revenue NSW via eDuties.              

For more information

If you require advice on the implications of farming land transfers for you, or advice on any other stamp duty issue, please contact Mira Brewster or Sam Mohammad.