Family Trusts are in the ATOs' sights!

The ATO has earmarked family Family Trusts for greater scrutiny. Why exactly is not yet clear but this may have future implications for some Rowe Partners farming clients who have legitimately set up these ownership structures.

When asked about the ATO’s plans, Patrick Connolly, Partner expressed some concern but said we "...really just need to wait and see what's on the ground after they're done shaking the tree." He says that "...our role as accountants is to make sure we’re on top of any changes to legislation and assist our farming clients to work within the regulatory system to achieve the best results." Patrick pointed out that Rowe Partners accountants understand the role of the ATO and the need to enforce compliance of existing legislation but says that this feels more like the ATO as agenda setter. He says that the ATO are playing law maker and he's not entirely comfortable with it. "These are long held, traditionally accepted tax and accounting practices. Farming is often generational. It’s important to preserve assets for future farmers and ensure the enterprise can provide income often for multiple families, over multiple decades. Some farm kids for example will study away with the intention of returning to the farm. When they do, they bring back new and innovative ideas that improve the business. We need these young people choose farming as a career so returning needs to be a viable option."

If the ATO removes the capacity for accountants to help clients maintain the value of their farms and the capacity to provide income in the future, then it becomes unsustainable and society will ultimately be the loser. Accountants specialising in farming such those at Rowe Partners hold the view that as people walk away from farms that are not returning for the farming families who own them and depend on them, more farms will be acquired by corporations and rural communities will suffer. Patrick says that "...the approach by the ATO feels short sighted but again, we don’t know yet what we’re dealing with. We’re keeping an eye on it and of course, our clients will be the first to know about any changes that are likely to affect them.”

Read all about the topic here in The Stock Journal.

Aussie Farming Facts (source: National Farmers Federation Farmers depend on smart policies that promote their growth, not constrain it.

  • There are approximately 85,483 agricultural businesses in Australia, 99 percent of which are Australian owned and the majority of which are family owned and operated.

  • Australian Agriculture is worth approx. $60 billion to our economy and farm gate output is tipped to exceed $84 billion by 2030.

  • Everyday farmers income is influenced by factors outside their control – the climate and nature (fires, floods, drought, storms, locusts and mice plagues), global market prices, input costs and government policy.

  • As of August 2019, 318,600 people were employed in agriculture, forestry and fisheries which accounted for around 2.5% of the national workforce.

  • Australian farmers produce almost 93 per cent of Australia’s daily domestic food supply.