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Tax deduction for landcare operations

You may be able to claim a tax deduction for capital expenditure on a landcare operation in Australia in the year it is incurred. Providing you are a primary producer, a rural land irrigation water provider who incurred the expenditure on or after 1 July 2004, or a business using rural land for taxable uses (excluding mining and quarrying businesses) you are eligible to claim a deduction.

Many operations fall under the category of a landcare operation.

For instance, when you primarily and principally:
– eradicate, exterminate or destroy plant growth detrimental to the land.
– put in fences to keep animals from areas affected by land degradation to prevent or limit further damage and assist in reclaiming the areas.
– eradicate or exterminate animal pests from the land.
– construct drainage works to control salinity or assist in drainage control.
– prevent or combat land degradation by means other than fences.

Other operations the ATO defines as a landcare operation include:
– constructing a levee or similar improvement
– erecting fences to separate different land classes as set out in an approved land management plan
– for expenditure incurred on or after 1 July 2004, a structural improvement or alteration, addition, extension or repair to a structural improvement that is reasonably incidental to the construction of a levee or drainage works.

Recouped expenditure
When you claim a deduction and receive recoupment, the recoupment is assessable income. However, you cannot claim a deduction if the capital expenditure is on plant unless you incurred the costs on certain fences, dams or other structural improvements.

If landcare expenditure is incurred by a partnership, each partner is entitled to claim the relevant deduction for their share of the costs.

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News

SMSF rollovers in SuperStream to be deferred

July 15, 2019

The 2019-2020 Federal Budget suggested a deferral of the extension of SuperStream to self-managed superannuation fund (SMSF) rollovers from 30 November 2019 to 31 March 2021. The commencement of this deferral has recently been confirmed by the government.

The deferral will coincide with the $19.3 million that will be provided to the Australian Taxation Office (ATO) over three years from 2020-21, enabling electronic requests to be sent to superannuation funds for the release of money required under a number of superannuation arrangements.

With the combined date for both bringing electronic release authorities into SuperStream and allowing SMSF rollovers, changes needed to update SuperStream will only need to be undertaken once. The deferral aims to reduce administrative costs for funds and allows for a more integrated design of SuperStream.

First introduced in 2015, SuperStream is a government standard for processing superannuation payments electronically in a streamlined manner. Currently, SuperStream can only process rollovers between two APRA funds electronically but with the change will see this process extend to SMSFs.

Regulations for the deferral to put into effect will be made promptly.