The general principles of the UCA apply to most depreciating assets used in primary production. However, 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
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.
Deductions for these assets are not available to a partnership. Costs incurred by a partnership are allocated to each partner who can then claim the relevant deduction for their share of the expenditure.
There are no specific balancing adjustment rules for these depreciating assets. However, the assets may be considered part of land for capital gains tax purposes. When the land is disposed of, any deductions you have claimed, or can claim, for the assets may reduce the cost base of the land. Refer to the Guide to capital gains tax for more information.
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.