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Primary production depreciating assets

Last updated 10 December 2019

The general principles of the UCA apply to assets used in primary production. Additionally, the UCA maintains the existing treatment of certain primary production depreciating assets.

The decline in value of the following primary producer depreciating assets is worked out using special rules:

  • facilities used to conserve or convey water
  • horticultural plants
  • grapevines.

If the expenditure incurred arises from a non-arm's length dealing and is more than the market value of what it was for, the amount of the expenditure is taken to be that market value.

For depreciating assets deductible under these rules, you cannot use the general rules for working out decline in value or claim the immediate deduction for depreciating assets costing $300 or less.

If you are a primary producer and an STS taxpayer, you can choose to work out your deductions for water facilities under either the STS capital allowance rules or the UCA rules. However, you must use the UCA rules for deductions for horticultural plants and grapevines. For more information about STS taxpayers, see STS taxpayers.

Any recoupment of expenditure on primary production depreciating assets is included in your assessable income.

For more information on primary production depreciating assets, refer to the publication Information for primary producers.

Primary producers may also be able to claim deductions for capital expenditure on landcare operations, electricity connections and telephone lines-see Capital expenditure of primary producers and other landholders.