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  • 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.

      Last modified: 08 Nov 2019QC 17793