Profit from forced disposal or death of livestock
You can elect to spread profit from the forced disposal or death of livestock over a period of 5 years (or 10 years if the forced disposal was in relation to the control of bovine tuberculosis). Alternatively, you can elect to defer the profit and to use it to reduce the cost of replacement livestock in the disposal year or any of the next 5 income years, any unused part of the profit being included in assessable income in the 5th income year.
An election to spread or defer profits can be made where:
- land is compulsorily acquired or resumed under an Act
- a State or Territory leases land for a cattle tick eradication campaign
- pasture or fodder is destroyed by fire, drought or flood and the proceeds of the disposal or death will be used mainly to buy replacement stock or to maintain breeding stock for the purpose of replacing the livestock
- livestock are compulsorily destroyed under an Australian law for the control of a disease (including bovine tuberculosis) or they die of such a disease, or
- official notification is received under an Australian law dealing with contamination of property.
Insurance recoveries
Insurance recoveries for loss of livestock or for loss by fire of trees that were assets of a primary production business carried on in Australia may, following an election, be included in assessable income in equal instalments over 5 years.
Double wool clips
Tax relief is available in relation to the proceeds of the sale of 2 wool clips arising in an income year because of an early shearing caused by drought, fire or flood. A wool grower can elect to defer the profit on the sale of the wool clip from the advanced shearing to the succeeding year.