Senate Rural and Regional Affairs and Transport Legislation Committee, , 2:53:02 to 2:58:31
Discussion on state-level stamp duty triggers during restructuring and the integrity measures maintaining the $800,000 individual cap for Farm Management Deposits.
Topics: Agricultural productivity, Government spending
Speakers: Matt Lowe, Hon Matthew Canavan, Chris Toyne, Unknown Speaker, Senator Glenn Sterle
>> It's approximately 6.3 billion that's held nationally across 41,013 accounts.
>> 41,013. >> Okay. and and is all of that potentially uh at at risk or or of these changes or only part of it?
>> Uh I mean it's a difficult question to comment on. Um I guess all farmers who hold farm management deposits in in in a discretionary trust structure will need to consider the options that Mr. twins outlined in that are available to them um in relation to what an optimal structure um will be for them going forward including how they treat their farm management deposits. Okay.
>> And it's important to note that only primary production income can be put into farm management deposits. Um and under the proposed changes um primary production income is exempt from that minimum 30% tax. So uh the farmers do have an option of keeping it within that trust thing uh structure um and potentially maning uh uh maintaining access to the farm management deposit scheme.
>> And so the average uh a farm manage deposits about 153,000. Is that right? billion over 41,000 accounts. It's about 150,000 on my numbers.
>> I don't I don't have that on hand. I'll
wide variation in in the amount uh held within individual um farm management
>> What's the latest sit? Well, while you Okay, I'll let you finish. You haven't got that figure. >> Okay. What's the latest situation with the rollover relief for stamp duty? So, will some of these change if they do want to convert some part of their business to a company structure potentially? My understanding is that triggers stamp duty at state level. Uh what's the status of discussions giving farmers relief there from state
>> Stamp duty is a matter for state and territories. Um so uh that is one of the uh the issues that has been recognized for these discussions is the uh potential application of stamp state and territory regimes to uh uh to these. Um so yeah uh that's uh I guess uh that that's where that matters at I suppose.
>> Right. So you have you had any discussions with your state colleagues about this issue for farmers?
>> Uh not in relation to this? No.
>> Right. Um uh have have you been asked to do any uh consideration or calculation of the compliance costs on farmers of having now to adjust to this new regime?
We haven't been asked to do any um work on compliance costs, Senator. Um we do acknowledge that in in any kind of change [clears throat] situation to um taxation arrangements, there is obviously an additional um requirement on anyone subject to those changes to um make themselves aware of those changes and optimize their um their settings um in relation to those changes. So we do acknowledge that that is an additional requirement on farmers.
>> Yeah. You the regime you've as you've expressed to me is quite confusing and I can't say I've got my head around it. Uh uh uh is there a simpler way here that we could just allow uh shareholders of a company to access or hold far farm
effectively, Senator, that's what the um the partial rollover relief allows um is um to give farmers that option um to retain primary production income in a discretionary trust that is exempt from the minimum tax requirement and would allow them to retain farm management deposits in that setting as well. So, that option does exist.
>> But another option, you've given me three options they could do. Another option would be that couldn't you just allow couldn't we change the law around farm management deposits and allow shareholders of companies to hold those?
>> Um so there I think there are particular reasons why and I'll ask the team to comment on it um why why we um [clears throat] confine farm management deposits the way we do
>> and I go back to the previous point that um it's a a scheme integrity measure. So, um, the, as I say, there's a there's a a cap on the amount of, uh, funds that can be held within farm management deposits for an individual, and it's $800,000, I believe. Um if if you allowed companies and trusts uh to be able to hold um farm management deposit accounts in their own right, um it would make it very difficult to enforce that $800,000 uh cap because that could be held by multiple uh uh you know company structures or or or or trusts associated with a farm business. So that's why it's uh limited to individuals, soul traders, partnerships, that sort of thing.
>> All right. It's a total mess. Um, okay. There'll be more to ask about this and other committees might um hand back. Do
>> keen to share the
>> Okay. Well, I'm in your hands chair, but I'll I'll leave it there on that.
>> You got many. >> Yeah. Okay. Did you got many senators?