As of 12 May 2015 Primary Producers are allowed to:
- Claim an immediate deduction for capital expenditure on fences and water facility assets such as dams, tank bores, pumps, windmills etc. used in the business of primary production
- Claim a deduction over three years for capital expenditure on fodder storage assets such as silos and tanks used to store grain and other animal feed
Capital expenditure incurred by a primary producer on the construction, installation or acquisition of a fencing asset is immediately deductible in the income year in which incurred, provided the expenditure was incurred primarily and principally for use in primary production business they conduct on land in Australia.
It should be noted that a deduction cannot be claimed for fencing expenditure that is eligible on a Landcare operation.
A deduction cannot be claimed if the fencing asset is in relation to a stockyard, pen or portable fence.
Capital expenditure incurred by primary production or the construction, installation or acquisition of a water facility is also fully deductible in the year of expenditure for primary producers conducting a primary production business on land Australia.
It should be noted that water facilities that are not used for business, ie water for homesteads are not eligible for the deduction.
Fodder Storage Assets
A primary producer can deduct a fodder storage asset over three income years if the expenditure was incurred for use in a primary production business conducted on land in Australia.
A fodder storage asset is defined as an asset that is primarily and principally for the purpose of storing fodder.
Examples of fodder storage assets include:
- Liquid feed supplements storage tanks
- Bins for storing dried grain
- Hay sheds
- Grain storage sheds
- Above ground bunkers
For more information, please contact Rachel Teelow at RSM on 9920 7400 or email [email protected]