Landcare operations cover what were previously known as land degradation measures. You can claim a deduction in the year you incur capital expenditure on landcare measures for land in Australia provided you incur it in any one of the following operations:
- eradicating or exterminating animal or plant pests from the land
- destroying weed or plant growth detrimental to the land
- preventing or combating land degradation other than by the use of fences
- erecting fences to keep out livestock or vermin 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 levee banks or similar improvements
- constructing surface or sub-surface drainage works-other than the draining of swamps or low-lying areas-to control salinity or assist in drainage control. In each case, apart from the construction of levee banks, the operation must be carried out primarily and principally for the purpose stated. This is to ensure that the outright deduction for landcare measures and the 3-year write off for facilities to conserve or convey water cannot both be claimed for the same item of expenditure. Where levee banks are constructed primarily and principally for water conservation, the cost is an allowable deduction under the water conservation provisions-see Water conservation and conveyance below.
If you are carrying on a primary production business on the land, you may claim the deduction even if you are a lessee. The deduction for landcare operation expenses is reduced when the land is not used wholly for either:
- a primary production business or
- a business for the purpose of producing assessable income from the use of rural land-except a business of mining or quarrying.
A recoupment of the deductible expenditure is assessable under Subdivision 20-A of the Income Tax Assessment Act 1997 (ITAA 1997). This Subdivision does not apply if the recoupment is assessable under another provision of the income tax law. For further information, ring the landcare hotline on 1800 060 425.
These deductions are not available to a partnership. Landcare operation expenses incurred by a partnership are allocated to each partner and deducted from the partner's income.