FENCING, sheds for fodder, silos and water infrastructure are all available now for 100 per cent depreciation claims for the tax year just ended.
Farmers should be taking advantage of legislative changes changes made in 2015 to make fencing and water infrastructure viable claims in the year they were built and changes last year to include fodder storage, said BMT Tax Depreciation chief executive Bradley Beer.
In an interview with The Land this week, he said the government was using such claims as a productive lever to stimulate regional economies.
He said there was no cap on the claims.
"Land is not depreciable, but what you put on it is," he said.
He said sinking a new bore, digging a new dam, pumps, tanks and windmills constituted water infrastructure.
"Last financial year we found an average first year depreciation claim of $126,326 for our agricultural clients," said Mr Beer, "that's a very large first year number and would contribute significantly to a business's cash flow."
He said many farmers and agricultural operations could be unaware of the types and size of their potential deductions.
"This will mean they are claiming less than they legitimately can, which could put undue pressure on a business," he said. "We would encourage anyone that suspects they are in this group to speak to their accountant or a qualified quantity surveyor as they may be pleasantly surprised by what they discover," said Mr Beer.
He said agricultural operations typically held a treasure trove of tax deductions due to the nature of the businesses, and many of the most lucrative items are common across farms. "As an example, we found the owner of a $2 million poultry farm with turnover of less than $10 million could claim $373,200 in the first year alone and over $1.2 million in cumulative deductions over the first five years," he said.
"Some of the items with the largest deductions for this owner included $304,700 for animal housing structures, $25,600 for refrigeration assets and $15,700 for silos and feed.
"We also found that a dairy farm, purchased for a similar amount and with similar turnover, could claim $345,300 in the first year and over $1.5 million over the first five years," said Mr Beer.
"Regardless of the type or size of one's farming operation, it is highly likely it holds tens of thousands of dollars in tax deductions - if not a lot more," he said.
"A BMT tax depreciation schedule is 100 per cent tax deductible and we won't charge for our services if we don't find double our fee in deductions in the first full financial year claim," said Mr Beer.
