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Exemption(s) for Certain Conveyances of Family Farms or Family Business - Essay Example
Here we are discussing the regulation 697 which is made for "Exception of tax for certain conveyance of family farms & Family Business". Generally individual has to pay land transfer tax if he or she transfers a farmed land. According to this regulation 697- there are some exemptions in land transfer tax that belongs to the same family it means if an individual transfer farmed land to its family member (I.e…
For exception of land transfer tax for conveyance of farmed land from individual (i.e. Father, Part 'A') to Family farm corporation (i.e. Son, Part 'B' (Owner of a Farm Corporation)) regulation 697 specifies the following requirements: First the transfer of land should me made between family members in which part 'B' is the owner of a farm corporation. Second requirement is that after transfer of farmed land the farm corporation will use the land for farming purpose only. No other use of the land is permitted. The first & second requirements of regulation 697 are similar to both individual to individual & individual to Family Farm Corporation. The Third requirement of regulation 697 is different in transferring the farmed land from individual to family farm corporation. In this all share holders of family farm corporation should be related to individual (Part A) who is transferring the land. Family Farm Corporation should have 95 % farming assets. During determination of farming assets the value of interest in the land being conveyed shall be included as an asset of the corporation.
According to this regulation 697- there are some exemptions in land transfer tax that belongs to the same family it means if an individual transfer business land to its family member ...