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Edited version of your private ruling
Authorisation Number: 1012524989819
Ruling
Subject: Conservation tillage refundable tax offset
Question
Are you entitled to the Conservation Tillage Refundable Tax Offset?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts and circumstances
You are a primary producer.
You are purchasing a brand new disc seeder, air cart and liquid fertiliser controllers (pumps, lines and tanks). The liquid distribution set up will all fit onto the new disc seeder bar.
You are purchasing the new plant in components from a number of different dealers:
The liquid fertiliser set up is an optional attachment for the air seeder. This system will allow you to accurately place trace elements, wetting agent, seed dressings and fungicides into untilled soil during a single pass at the point of seeding.
Assumption
You will obtain your Research participation certificate from Department of Agriculture, Fisheries and Forestry (DAFF) by the end of the year of income in which you started to use the equipment or installed it ready for use.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 385-J
Income Tax Assessment Act 1997 Section 385-175
Income Tax Assessment Act 1997 Section 385-180
Income Tax Assessment Act 1997 Section 385-185
Income Tax Assessment Act 1997 Section 385-235
Reasons for decision
Qualifying primary producers may be entitled to a refundable tax offset of 15% of the cost of an eligible no-till seeder (eligible seeder) used in conservation tillage farming practices.
The offset is only available for eligible seeders installed ready for use between 1 July 2012 and 30 June 2015. From 1 July 2015, the refundable tax offset will be repealed.
To be eligible you need to:
· hold the eligible seeder
· start to use, or install ready for use the eligible seeder in the course of carrying on a primary production business (the eligible seeder must not have been used previously, including by someone else)
· have a Research participation certificate from DAFF.
You must complete the application for the Research participation certificate with DAFF by the end of the income year in which you started to use the equipment or installed it ready for use.
Section 385-235 of the Income Tax Assessment Act 1997 defines an eligible no-till seeder. An eligible seeder is a no-till seeder (comprising the tool or both a cart and tool) and includes a disc opener with single, double or triple disc blades designed to achieve minimum soil disturbance.
The fact sheet on the ATO website provides practical advice and examples:
· Eligible seeders that are a combination of cart and tool may be made of components from different brands, though each component must be new for both components to be eligible for the offset.
· Optional equipment that forms part of the eligible seeder, such as work light kits and press wheels, will form part of the cost that is eligible for the offset.
· Example 2: Purchase of cart and tool from two dealers
· Jess looked into buying a no-till seeder and decided to buy a new cart from one dealer and a new tool from another dealer. Jess signed contracts with both dealers on May 2013. The tool component met the minimum tillage points requirement. Her cart arrived on 10 June 2013, but the tool did not arrive until the following month on 15 July 2013. Jess set up her new eligible seeder and it was ready for use on 18 July 2013.
If Jess satisfied all other eligibility requirements she can claim the refundable tax offset when lodging her 2013-14 tax return.
You have stated that you are purchasing a no till disc seeder. Three components will be purchased new from different dealers. Combined these three components will form a combined cart and tool seeder with optional equipment. Provided you obtain your Research participation certificate from DAFF by the end of the income year in which you started to use the equipment or have it installed ready for use, you will be entitled to claim the conservation tillage refundable tax offset.