Landcare operations
You can claim a deduction for capital expenses on a landcare operation for land in Australia if you are:
- a primary producer
- a business using rural land for a taxable purpose (except when mining or quarrying)
- an irrigation water provider (if your expenditure incurred on or after 1 July 2004).
Your deduction will be reduced if you use the land for a non-taxable purpose, such as your home.
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Definitions
Landcare operations
A landcare operation is one of the following:
- primarily and principally
- 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 using fences)
- erecting fences to keep animals out of areas affected by land degradation
- constructing drainage works to control salinity or assist in drainage control
- erecting fences to separate different land classes in accordance with an approved land management plan
- constructing a levee or similar improvement
- a structural improvement or altering, adding, extending or repairing a structural improvement that is reasonably incidental to the construction of a levee or drainage works (only for expenditure incurred on or after 1 July 2004).
Irrigation water provider
An irrigation water provider primarily and principally supplies water to primary producers or to businesses using rural land (except for a mining or quarrying business). Water suppliers who use motor vehicles (for example, water tankers) are not considered irrigation water providers.
Approved land management plan
An approved land management plan:
- 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
- has been prepared, or approved in writing, as a suitable plan by an
- authorised officer of an Australian government agency responsible for land conservation
- approved farm consultant.
A register of consultants authorised to prepare land management plans for the purpose of landcare deductions is held by the Department of Agriculture.
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Claiming deductions
When you claim a deduction, you need to consider:
Recouped expenditure
If you recoup any of the money that you have claimed a landcare operations deduction for, it must be included in your assessable income.
Expenditure on plant
You can only claim a deduction under the landcare provisions for capital expenditure on plant if it is on certain fences, dams or other structural improvements as defined in landcare operations.
If you can't claim a deduction under the landcare provisions, you work out the decline in value using the general rules for depreciating assets.
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Partnership expenditure
If the costs were incurred by a partnership, a partner can only claim the deduction for their share of the expenditure.
Primary producers and other selected rural businesses may be able to claim a deduction for capital expenditure on landcare operations.