The greatest threat to farm continuity may no longer be tax

23 June 2026

The greatest threat to farm continuity may no longer be tax.

For NSW farming families, succession planning has traditionally centred on taxation and legal issues such as CGT, duty, entities and wills. Those technical issues still matter, but after attending the Tax Institute Agribusiness Intensive in Brisbane, the bigger risks to continuity increasingly appear to lie in governance, communication, fairness and control.

From technical barriers to governance risk

Historically, CGT and duty outcomes (and the way farms were held often, personally or through simple partnerships) made intergenerational transfers expensive. As a result, succession was often deferred until death.

Over time, legislative changes have reduced some of that friction. In NSW, section 274 of the Duties Act 1997 (NSW) provides some exemptions for certain family transfers of primary production land and since 19 May 2022 it has been extended to also accommodate transfers to companies and trusts controlled by relevant family members.

At the federal level, the small business restructure roll-over (Subdivision 328G) and the small business CGT concessions (Division 152) may, in appropriate circumstances, allow transfers of primary production business real property to a discretionary trust or company owned by discretionary trust without triggering an income tax liability.

Governance and control

With better technical tools available (see our previous article), the more difficult question is often defining what the family is trying to achieve. Where one child has worked on the farm for decades and others have pursued off-farm careers, strictly “equal” outcomes may be commercially unrealistic. The real task is to define what is fair and to document that early.

Many disputes arise not from a defective structure, but from unspoken expectations. A key feature of many business structures is the separation of ownership and control. Where a business operates through a trust or company, continuity depends on who holds decision-making power through roles such as directors and shareholders, the trustees and the appointor. A succession plan may successfully transfer assets but still fail to ensure continuity if it does not clearly address how control passes on retirement, incapacity or death.

What this means for our clients

Succession is increasingly about governance; establishing structures for long term leadership development, not merely estate planning. Our value lies in helping families align their objectives, control arrangements and supporting documentation early, and then using the available NSW duty and federal restructuring provisions to implement that agreed pathway.

Conclusion

Tax and legal structures are now more implementation tools than the primary obstacle. The long- term continuity of a farm business will frequently turn on issues no concession can fix: clarity, fairness, and who really holds control.

Pious Matimati is a Tax Advisor at PrincipleFocus.