A primary producer and a business using rural land and, for expenditure incurred on or after 1 July 2004, a rural land irrigation water provider.
A rural land irrigation water provider is an entity whose business is primarily the supply of water (other than by using a motor vehicle) to primary producers or to businesses using rural land (except for a mining or quarrying business).
You can claim a deduction for capital expenditure you incur on a landcare operation for land in Australia in the year it is incurred.
A landcare operation is one of the following operations:
- eradicating or exterminating animal pests from the land
- eradicating, exterminating or destroying plant growth detrimental to the land
- preventing or combating land degradation other than by the use of fences
- erecting fences to keep out animals from areas affected by land degradation to prevent or limit further damage and assist in reclaiming the areas
- erecting fences to separate different land classes in accordance with an approved land management plan
- constructing a levee or similar improvement
- constructing drainage works - other than the draining of swamps or low-lying areas - to control salinity or assist in drainage control, or
- for expenditure incurred on or after 1 July 2004, a structural improvement or an alteration, addition, extension or repair to a structural improvement that is reasonably incidental to the last two operations (that is, the construction of a levee or drainage works).
The deduction is available if you use the land for either:
- a primary production business, or
- a business using rural land for a taxable purpose (except mining or quarrying).
The deduction is reduced to the extent that you do not use the land wholly for either of these purposes.
For a rural land irrigation water provider, the deduction is available for land that other entities use for either a primary production business or for a business using rural land (except mining or quarrying). The deduction is reduced to reflect any use of the land for a non-taxable purpose.
No. Such expenditure cannot be deducted under this concession if it was incurred before 1 July 2004. This would include repairs of a capital nature, such as 'initial repairs' and expenditure on a bridge or a fence that was only reasonably incidental to the construction of a levee or drainage works. Non-capital repairs would normally be immediately deductible under the usual repairs (section 25-10), even if they were incurred before 1 July 2004.
No deduction is available if the capital expenditure is on plant, unless it is on certain fences, dams or other structural improvements. The decline in value of plant not deductible under the landcare provisions is calculated using the general rules for working out decline in value.
Any recoupment of the expenditure is assessable income.
The deductions are claimed by the partners rather than the partnership. Costs incurred by a partnership are allocated to each partner who can then claim the relevant deduction for their share of the costs.
An approved land management plan is a plan that:
- shows the different classes within the land and the location of any fencing needed to separate any of the land classes to prevent land degradation
- describes the kind of fencing and how it will prevent land degradation, and
- has been prepared by, or approved in writing as a suitable plan for the land by:
- an officer of an Australian government agency responsible for land conservation who has authority to do so, or
- an individual who was at the time approved as a farm consultant.
A register of authorised consultants who can prepare land management plans for the purposes of landcare deductions is held by the Commonwealth Department of Agriculture, Fisheries & Forestry. Information about gaining access to the register is available on the DAFF website .
The following additional information is available
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For further details, businesses should phone 13 28 66 (access the income tax option) and tax agents 13 72 86 (FKC 2 1 3).
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Other relevant information links which may be of interest include:
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Note : The landcare operations provisions are contained in sub-division 40-G of the ITAA 1997.
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Last Modified: Friday, 19 December 2008