• Claiming primary production accelerated depreciation in your 2015 income tax return

    On 22 June 2015, the law was changed to allow primary producers to:

    • immediately deduct the cost of fencing assets and water facilities
    • depreciate over three years the cost of fodder storage assets.

    Use these additional instructions if you are eligible to claim a deduction for these expenses in your 2015 income tax return.

    Applying the new law

    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

    The new law applies to eligible assets and expenditure incurred from 7.30pm (AEST), 12 May 2015. If you incurred the expenditure before this time, the previous law continues to apply (refer to the relevant 2015 tax return instructions).

    The previous law also continues to apply to expenditure on a fencing asset that is a stockyard pen or portable fence.

    What to claim under the new law

    If the expenditure was on a water facility or fencing asset, claim the full amount in your 2015 income tax return. If the expenditure was on a fodder storage asset, claim 1/3 of the amount in your 2015 income tax return.

    Completing your 2015 tax return

    Individuals

    Claim the accelerated depreciation amount at W Landcare operations and business deduction for decline in value of water facility item P8 Reconciliation items of the Business and professional items schedule for individuals 2015.

    If you were in a partnership that incurred the expenditure, claim your share of the amount at I Landcare operations and deduction for decline in value of water facility item 13 of the Tax return for individuals (supplementary section).

    If you are an eligible small business entity and have chosen to use the simplified depreciation rules (for example to claim the full cost of a fodder storage asset that cost less than $20,000), claim the amount at M Depreciation expenses item P8 of the Business and professional items schedule for individuals 2015. Also include the amount at A Deduction for certain assets (costing less than $1,000) item P10 of the schedule.

    See also:

    Trusts

    Claim the accelerated depreciation amount as an expense subtraction at Reconciliation items, B Expense reconciliation adjustments item 5. Also include the amount at L Landcare operations and deduction for decline in value of water facility item 48.

    If the trust is an eligible small business entity and has chosen to use the simplified depreciation rules (for example to claim the full cost of a fodder storage asset that cost less than $20,000), claim the amount at K Depreciation expenses item 5. Also include the amount at A Deduction for certain assets (costing less than $1,000) item 49.

    Next step:

    Trust tax return instructions 2015

    Companies

    Claim the accelerated depreciation amount at N Landcare operations and deduction for decline in value of water facility item 7.

    If the company is an eligible small business entity and has chosen to use the simplified depreciation rules (for example to claim the full cost of a fodder storage asset that cost less than $20,000), claim the amount at X Depreciation expenses item 6. Also include the amount at A Deduction for certain assets item 10.

    Next step:

    Company tax return instructions 2015

    Partnerships

    A deduction for primary production accelerated depreciation is generally not available to a partnership in calculating its net income or loss. Rather, the expenditure is allocated to each partner who claims the relevant deduction (see individuals).

    However, if the partnership is an eligible small business entity and has chosen to use the simplified depreciation rules (for example to claim the full cost of a fodder storage asset that cost less than $20,000), claim the amount at K Depreciation expenses item 5 of the partnership return. Also include the amount at A Deduction for certain assets item 48.

    Next step:

    Partnership tax return instructions 2015

    Last modified: 01 Sep 2015QC 46850