Tax deduction for primary producer fencing and fodder storage

Overview

The Accelerated Depreciation for Primary Producers provides farmers with tax deductions for the full cost of fencing or fodder storage assets. 

If you incurred a capital expense on a fencing asset:

• after 7:30pm AEST, 12 May 2015, you may claim an immediate deduction in the income year in which you incurred the expense
• before 7:30pm AEST, 12 May 2015, you may deduct an amount for its decline in value based on its effective life

If you incurred a capital expense on a fodder storage asset:

•  on or after 19 August 2018, you may claim an immediate deduction in the income year in which you incurred the expense
•  before 19 August, but it was first used or installed ready for use on or after 19 August 2018, you may claim an immediate deduction in the income year in which you incurred the expense. If you already claimed a partial deduction in a previous income year, you will need to amend the previous year's tax return to claim a deduction for the full amount in the year you incurred the expense

A fencing asset includes a new fence, as well as any structural improvement, repair of a capital nature, alteration, addition or extension to an existing fence.

Typical fencing assets include:

• posts
• rails
• wire
• droppers
• gates
• fittings
• anchor assemblies

A fodder storage asset is primarily and principally used to store fodder. It may also be a structural improvement, a repair of a capital nature, or an alteration, addition or extension, to an asset or structural improvement, that is primarily and principally for the purpose of storing fodder.

Typical fodder storage assets include:

• silos
• liquid feed supplement storage tanks
• bins for storing dried grain
• hay sheds
• grain storage sheds
• above-ground bunkers

Check if you can apply

To be eligible, you must:

• be a primary producer as defined by the Australian Taxation Office (ATO)

Primary producers are defined as:

• an individual, partnership, trust or company
• undertaking:
  • plant or animal cultivation (or both)
  • fishing or pearling (or both)
  • tree farming or felling (or both)

Find out more about how the ATO defines primary producers at Primary Production Activities.

Find out more about the eligible assets for accelerated depreciation at Fencing and Fodder Storage Assets.