Fodder Storage Assets Allowed Immediate Write-Off

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The cost of fodder storage assets, such as silos and hay sheds, used to store grain and other animal feed will be allowed an immediate write-off. This measure, which was recently tabled into parliament, will only apply for assets first used or installed ready for use on or after 19 August 2018.

For primary producer clients, this provides an opportunity to utilise additional or excess funds into an asset that gets an immediate deduction. This puts fodder storage assets in line with immediate deductions for water facilities, fencing assets and landcare operations.

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.

This table identifies the treatment of fodder storage assets based on when the asset was first installed and ready for use:

First installed and ready for use Tax treatment for fodder storage assets
Before 7:30 pm on 12 May 2015 Deductible based on the effective life table.
Between 7:30 pm on 12 May 2015 and 18 August 2018 Deductible over three years, being a one-third deduction each financial year.
On or after 19 August 2018 Fully deductible in the year first installed and ready for use.

Contact our office today on  03 9727 6700 if you would like to discuss your situation & what you can claim.

This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances.  While The Field Group believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the corporations Act 2001.

About the author

Jon has been with The Field Group since 2005 and became a director in 2012. Jon specialises in servicing businesses in the small and medium enterprise (SME) space. This includes advising in the areas of income tax, GST, Fringe Benefits Tax, structuring, cash-flow and business acquisitions.

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