• Abnormal receipts

    Grants and subsidies

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Generally, amounts received by way of grants or subsidies will either be assessable as income under ordinary concepts or as a capital receipt.

    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 five years. 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 five income years. Any unused part of the profit is included in assessable income in the fifth income year.

    An election to spread or defer profits can be made where you dispose of the stock, or they die, because:

    • 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 you will use the proceeds of the disposal or death mainly to buy replacement stock or to maintain breeding stock for the purpose of replacing the livestock
    • they are compulsorily destroyed under an Australian law for the control of a disease (including bovine tuberculosis) or they die of such a disease, or
    • you receive official notification under an Australian law dealing with contamination of property.

    Insurance recoveries

    Where you have an assessable insurance recovery for loss of livestock or for loss by fire of trees that were assets of a primary production business carried on in Australia, you can elect to include the amount in assessable income in equal instalments over five years.

    Double wool clips

    Tax relief is available in relation to the proceeds of the sale of two 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 clip from the advanced shearing to the next year.

    Last modified: 31 Aug 2010QC 18464