Accelerated depreciation for primary producers

In the 2015-16 Federal Budget, the government announced that it will allow primary producers to:

  • immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills
  • depreciate over three years the cost of fodder storage assets such as silos and tanks used to store grain and other animal feed

Currently, primary producers can claim a deduction for the decline in value of:

  • fences over a period up to 30 years
  • water facilities over three years and
  • fodder storage assets over a period up to 50 years.

The government has announced that this measure is effective immediately (as of 12 May 2015).

The government also announced changes to accelerated depreciation for small businesses to allow those with aggregated annual turnover of less than $2 million to immediately deduct each asset that cost less than $20,000.

Those primary producers who meet the definition of a small business entity may choose to use the accelerated depreciation deduction for small businesses or the accelerated depreciation for primary producers for assets that cost less than $20,000.

For further information, visit the Australian Taxation Office website: https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Small-Business—expanding-accelerated-depreciation/

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