Some well needed relief for drought stricken regions
THE Shed Company has dealers in rural NSW and QLD in the areas affected by the current drought situation.
As such, we have a deep understanding of the issues that our farming and rural areas are facing right now.
This is why when the Prime Minister last night announced that there would be additional assistance for Farmers we were over the moon that something was finally going the Farmer's way.
This assistance includes Primary producers can immediately deduct (rather than depreciate over three years) the cost of fodder storage assets, such as silos and hay sheds used to store grain and other animal feed storage, making it easier for farmers to invest in and stockpile fodder. Farmers will be better placed to invest in fodder storage as part of the instant depreciation initiative. This measure will be available for fodder storage assets first used or installed ready for use from today, and complements the $20,000 instant asset write-off already available for small businesses. Legislative changes will be made to give effect to this measure.
Farmers will be able to claim the cost of the shed used for fodder storage in the financial year that it was purchased and ready for use. Bringing forward the tax deduction may provide you with a reduction of income tax payments for the current and next financial year (due to lower instalments) and allow the cash flow to be applied to more important costs.
For example, if a shed costing $110,000 (incl GST) was purchased. Your GST can be claimed in the current BAS.
Currently, the shed would be depreciated over 3 years. The deduction is then $33,333 per year with a tax saving, assuming a 30% tax rate, of $10,000 for the next 3 years. Under these new arrangements, the Farmer would be able to claim the full $100,000 as a tax deduction in the current year. Assuming a 30% tax rate, this is a tax saving of $30,000. Making the cost of the shed $70,000. Even if you did not have taxable income in the current year, you can carry this loss forward to offset future income.
This is general information only and should not be taken as constituting professional advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.
If you're looking at taking advantage of this new assistance you can request a quote for your new fodder shed here.
Disclaimer: Information is correct as at time of publishing. For the latest information please contact us.