WHAT THE TAX?!!

Fodder storage assets allowed immediate write-off

Legislation has been entered into parliament which intends to allow an immediate deduction for fodder storage assets for primary producers. The proposal in the parliamentary bill is to amend ITAA 1997 s 40-548 which allows a fodder storage assets to be written off over three years.

A primary producer's expenditure on a fodder storage asset must have been incurred primarily and principally for use in a primary production business they conduct on land in Australia. If a taxpayer is not a primary producer or the asset is not used primarily in a primary production business, the ordinary capital allowance rules apply instead.

The 'primarily and principally' test refers to the concept that the fodder storage asset is used for the primary producer's own livestock.

Examples

The following is a list of examples of fodder storage assets for primary producers:

                • Silos

                • Liquid feed supplement storage tanks

                • Bins for storing dried grain

                • Hay sheds

                • Grain storage sheds, and

                • Above-ground bunkers.

Client opportunities

To be eligible for the immediate write-off, the fodder storage asset must be first installed and ready for use in the primary production business on or after 19 August 2018.

This change will align fodder storage asset deductions under the capital allowance rules with fencing assets and water facilities.

Information sourced using CCH iknow