Duties Act – Intergenerational Transfers Changes. Does This Affect You?

Intergenerational Transfers Affected by Changes to the Duties Act 2001 (Qld)

New transfer duty concessions will now be available for transferees, particularly in relation to intergenerational transfers of prescribed and primary production businesses, pursuant to the Queensland Government’s welcomed changes to the Duties Act 2001 (Qld) .

How does this affect eligibility?

Transfer duty concessions are now available for primary production businesses or prescribed businesses. A primary production business is a business of agriculture, pasturage or dairy farming. A prescribed business solely involves one of the following business activities:
- excavating and earthmoving
- picture framing
- gunsmithing
- locksmithing
- manufacturing
- processing and packaging
- printing and publishing
- boot and shoe repairing
- retailing and wholesaling (whether or not it involves repairing or installing goods sold)
- upholstering
- undertaking or funeral directing
- other (being beauty salon or barber shop, bus service, cinema, crematorium, engineering workshop, laundry or laundrette, newsagency, travel agency or real estate agency, repair and service workshop, rental business, restaurant or café, service station, sports complex or gymnasium, warehouse or bulk storage complex).

Concessions

If eligible, no transfer duty is payable if the business property carries on a primary production business. If residential land, which is adjacent to the land used to carry on a primary production business, is transferred under the same transaction then no transfer duty is payable. Unfortunately, transfer duty on water allocations still must be paid.
If the business is a prescribed business, transfer duty rate must be applied to any purchase. Here, transfer duty is payable on business property worth $500,000 or more. For example, if a property is worth $750,000, duty is payable on $250,000 (being the amount above $500,000). A list of transfer duty rates is available at the Queensland Government website.

Requirements

To qualify for a concession, the following is required:
1. the Transferor conducts the business and must be:
a. for a primary production business, a defined relative (spouse, siblings and children) of the transferee; or
b. for a prescribed business, an ancestor of the transferee.
2. the Transferee intends to carry on the business;
3. the Transferee carries on the business after the transfer;
4. the Transferee does not acquire the business property as an agent for another individual or as trustee; and
5. if a prescribed business, the transfer must occur by way of gift.

Takeaway – What does this mean for you?

When it comes to intergenerational transfers, questions of eligibility requirements and concessions are complicated. Forms and documents required to satisfy the Office of State Revenue can be daunting, too. If you need advice regarding transfer duty exemptions, please contact the experts at Rouse Lawyers. We have teams who specialize in property law, estate planning and taxation.

Need help and advice about intergenerational transfer duties? Get expert legal and taxation advice at Rouse Lawyers today.

Duties and Other Legislation Amendment Bill 2016 on 17 June 2016

Are You Putting Off Making A will? Don’t Wait. Here’s Why.

Putting Off Making A Will? Don’t Wait. Here’s Why.

We are never able to predict when or how our time will come. Of all the things on our lengthy to-do lists, making a will is one of the most important things you can do for your family’s future. Have you been putting off drawing up your will?

If this is something you haven’t managed to do yet, you’re not alone. We at Rouse Lawyers’ Estate Planning department understand that it can be very difficult to think about your own death. It’s even harder to imagine yourself in a situation where you’re unable to make vital decisions for yourself.

Sadly, however, life is uncertain and the consequences of not planning ahead can make things very difficult for your loved ones. They will already be battling to cope with the fact that they have lost you, but the situation will be made far worse for them if you didn’t make a will.

What happens if you die without a will?

We have an article on our practice’s website that describes more fully what happens when you die intestate (without having drawn up a will). Here are a few key points to consider:

• Your loved ones must assume the whole burden of sorting out your affairs and arranging the funeral.
• Your assets will be distributed according to the intestacy rules, which might not be what you wanted.
• It may not be the most tax-efficient way of distributing the assets and could cut down on income flexibility. The beneficiaries will be paid out their shares directly upon your estate being wound up.
• The administrative burden of demonstrating entitlement to various banks, corporations and government institutions will be greater without a will.

The situation will be almost as bad for your loved ones if you don’t die but are left unable to make decisions for yourself if there is nobody with your Power of Attorney who can make them for you.

Can I write my will myself?

Yes, you could – in theory, but it could very easily backfire if you get it wrong. Our Estate Planning department is staffed by professionals with extensive experience who can ensure your will is complete, effective and covers all eventualities. This includes minimising the chances of it being challenged in future and directing assets not normally included in a will.

How much does it cost?

The cost of making a will varies depending on your circumstances, but the team at Rouse Lawyers has a fundamental commitment to providing maximum value.

Your first consultation with us will be free and we will talk with you about your options. This way, you can make an informed choice about the best plan for you going forward. In most cases, we will work on a fixed-fee basis so you will know upfront what we are going to do for you and what the cost will be.

What an experienced Estate Planning lawyer can do for you

• Direct your assets in the most appropriate fashion, taking into consideration your personal and other assets including trust assets, superannuation, joint tenancies and business assets or interests.
• Assist you to appoint an executor to relieve your loved ones of the burden of paperwork, arranging the funeral and investing assets for the beneficiaries until administration of the estate is finalised, managing business interests, determining liabilities and distributing your assets in accordance with your will.
• Help you set up a Power of Attorney so that there is someone who can make health and/or financial decisions for you if you aren’t able to make them for yourself in the event of injury, sickness or even travel.
• We will provide you with a Personal Record Template which you can use to record all the details that your executor and beneficiaries might need to know. This might include the locations of all your assets, contact numbers for your accountant, financial planner, insurance details, family history or even the passwords for your phone or social media accounts to make their lives so much easier.

As I said at the beginning, thinking about your own death or incapacity isn’t a very cheerful thing to do. I can promise you, however, that investing an hour of your time in making a will now will make things so much easier on your loved ones in the long run and it will be a weight off your mind, too.

Tammy Parsons is a qualified, experienced Estate Planning lawyer. Contact Tammy for helpful advice about making a will.

Need advice about estate planning or making a will? Contact the experts at Rouse Lawyers today.

Need Body Corporate Management Advice? This Case Study Is A Must-Read

Body Corporate Management Case Study: The Most Expensive Balcony In Queensland?

The High Court has recently overturned a Queensland Court of Appeal decision to find in favour of a body corporate, which was fighting an owner’s attempt to use common property airspace to expand two balconies in his apartment.[i] The essential issue before the High Court was whether the body corporate had acted reasonably in refusing the owner’s request.

Always get advice from a reputable property lawyer if you face challenges with body corporate management.

Body corporate case study – background

An owner at Viridian Noosa Residences wanted to join his two existing balconies, and the space in between them, to create one deck. To do so, he required the exclusive use of common property airspace – 5m2 – between the two balconies.

To proceed with the extension, the owner needed a resolution without dissent at a general meeting of the Body Corporate. In August 2012, the owner put his motion at an extraordinary general meeting, however some lot owners voted against it.

The owner then applied to the Commissioner for Body Corporate & Community Management arguing that the Body Corporate acted unreasonably in voting against the motion. In September 2013, the Commissioner found that the Body Corporate had acted unreasonably and allowed the owner to proceed with the work.

In response to the Commissioner’s decision, two of the dissenting owners appealed the decision to the Queensland Civil and Administrative Tribunal (QCAT). In October 2014, QCAT overturned the Commissioner’s decision stating that the decision of the Commissioner’s had the effect of “overriding the will of a substantial majority of owners”.[i]

The owner appealed QCAT’s decision to the Queensland Court of Appeal who found, in November 2015, that the Commissioner’s decision was not wrong in law and QCAT should not have set it aside.

The dissenting owners then challenged the Court of Appeal’s decision in the High Court.

The High Court ruling and result

The High Court ultimately sided with the Body Corporate, finding that they had, in fact, acted reasonably and overturned the Qld Court of Appeal decision. This effectively restored the original decision of the Body Corporate made more than four years ago.

In discussing what it meant to act “reasonably”, the High Court stated that:

“opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent’s property rights may be seen to be unreasonable. Opposition prompted by spite, or ill-will, or a desire for attention, may be seen to be unreasonable in the circumstances of a particular case. But, as is apparent from the foregoing reasons, the adjudicator, the Tribunal and the Court of Appeal all appreciated that this is not such a case.”[i]

Importantly, the High Court made it clear that:

“the proposal in question was apt to create a reasonable apprehension that it would affect adversely the property rights of opponents of the proposal and the enjoyment of those rights. In these circumstances, opposition of the lot owners who dissented from the proposal could not be said to be unreasonable.”[ii]

What does this mean for body corporate managers?

Prior to this decision, there was a great deal of uncertainty about decisions of body corporates, which could be reversed on appeal for being “unreasonable”. With this High Court decision, a body corporate should find it easier to assess whether a proposed decision is “reasonable”, allowing them to take appropriate steps to reduce the risk of such a decision being held to be unreasonable.

Body corporate management is a complex legal environment, which impacts owners, investors and tenants alike. This High Court decision is one of many cases setting precedents for future decisions made in this area. If you have questions about your involvement with a body corporate, the Property team at Rouse Lawyers can help. Avoid turning property decisions into expensive legal challenges!

Need help and advice about any aspect of body corporate management? Contact the Property team at Rouse Lawyers today.

 

 

[i]^{Ainsworth v Albrecht [2016] HCA 40.}

[ii] ^{Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294, [1].}

[iii]^{Ainsworth v Albrecht [2016] HCA 40, [63].}

[iv]^{Ainsworth v Albrecht [2016] HCA 40, [64].}