Depreciation for farmers brought forward
28 May 2015
Primary producers can now claim accelerated depreciation on capital expenditure on water facilities, fodder storage assets and fencing incurred since the 2015 Budget was handed down at 7:30pm on 12 May.
In his budget speech, Federal Treasurer Joe Hockey announced these measures with a start date of 1 July 2016, however yesterday issued a media release bringing forward these changes to begin from 7:30pm on 12 May 2015.
Primary producers will now be able to:
- Immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills;
- Depreciate over three years the cost of fodder storage assets such as silos and tanks used to store grain and other animal feed.
Under the previous arrangements, primary producers could claim a deduction for the decline in value of:
- Fences over a period up to 30 years,
- Water facilities over three years, and
- Fodder storage assets over a period up to 50 years.
These measures are in addition to the immediate deductions for depreciating assets up to the value of $20,000 available to all businesses (including primary producers) with an aggregated turnover of less than $2 million.
Please be aware that this is only an announcement at this stage and the law to give effect to these changes has not been enacted. We expect that it will be passed by parliament, but cannot guarantee this until it becomes law.
Whilst every client’s situation needs to be addressed individually, it is clear that many may benefit from these measures. If you would like to know more please speak with your local Boyce accountant.
Source: The Hon Joe Hockey MP http://jbh.ministers.treasury.gov.au/media-release/050-2015/