Primary Producers will now be entitled to claim an immediate deduction for capital expenditure on water facilities and fencing assets and to deduct capital expenditure on fodder storage assets over three years under recent amendments to the tax laws.
The purpose of this is to encourage primary producers to prepare for droughts.
This replaces the existing law which only enabled deductions for capital expenditure for these assets over the following periods:
- Water facilities over a three year period;
- Fencing over the effective life of the asset (which could be up to 30 years);
- Fodder storage assets over the effective life of the asset (which could be from 10 to 50 years).