Due to the current dry conditions that have adversely affected rural communities across the country, our government have provided taxation measures to help farmers. Below we have simplified some of the taxation benefits currently available for this financial year for farmers.
Instant Asset Write-off
In April 2019 announced that the instant asset write-off budget would be increased from $25,000 to $30,000, and an increase in the business turnover threshold from $10 million to $50 million. This measure allows eligible small businesses, including those in primary production, to continue claiming a full deduction for business assets in the year they are purchased and/or installed. This helps agribusiness cash flows.
Fodder Storage Deductions
Primary producers are able to immediately deduct the cost of fodder storage assets such as hay/grain sheds and silos. This measure is available for fodder storage assets installed ready for use on or after 19th August 2019.
Income Tax Averaging
Primary producers can recommence income averaging 10 years after opting out. Prior to this amendment, a primary producer opted out of income averaging could not return to the arrangement.
Drought Affected Primary Producers
The Australian Taxation Office can help people affected by drought or natural disasters with:
- More time to pay.
- Waiving penalties or interest charged at a time you are affected by drought.
- Payment plans with interest free periods.
- Adjusting pay as you go installments to better suit your circumstances.
- Tax incentives for primary producers.
In special circumstances, the Commissioner for Taxation may release individuals from payment of income tax, fringe benefits taxes and some other taxes where it is shown that payment would cause serious hardship.
There are a number of taxation measures and concession available to drought-affected primary producers that include:
- Profit from the forced disposal or death of livestock.
- Proceeds from double wool clips.
- Insurance recoveries.
To find out more about tax concessions and deductions available to those affected by drought please follow this link: https://www.agriculture.gov.au/ag-farm-food/drought/assistance/tax-relief