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Phone
(02) 6021 6762

Email
admin@taxbalance.com.au

Address
460 Swift St, Albury NSW 2640

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Farming Enterprises

We can assist you with all your tax planning and compliance issues. We can help you with things such as livestock  /grain trading, GST  /Fuel Tax Credit / BAS issues, Farm Management Deposits, as well as keeping up to date with current legislation from the Australian Tax Office.

There are a number of current concessions that may benefit your business such as Instant Write offs for assets purchased under $20,000, and accelerated depreciation for other assets, Small business restructure rollovers, Small Business income tax offsets, and Company tax rate cuts for Small Business.

 

01

Know What You Can Claim

When it comes to your business tax, it’s all about minimising the impact of taxation payments on the cash flow of your business.

If you run a sheep farm, for instance, you can claim dog food as a business expense if you have working dogs, even if you have purchased it in with your groceries.

The same goes for vet bills. If you just thought of the animals as pets rather than a vital business expense, think again.

02

Use the $20,000 Asset Deduction

This allows for the immediate write-off of business assets purchased up to $20,000.

There is no guarantee that this will remain in place in the years ahead, so farmers should make the most of it while they can. At this time the deduction only applies to assets purchased before June 30th 2017 for small businesses.

03

Embrace Accounting Technology

Everyone is pretty good these days keeping up with the GST requirement of up-to-date records every three months, even small scale farmers.

Many farmers are moving away from the paper-based ‘shoebox method’ of keeping receipts and using cloud-based systems such as Xero to keep track of their business expenses, allowing easier and quicker record keeping.

04

Seek Advice if You're Looking To Diversify

Changing your business strategy, making a major infrastructure investment or purchasing other businesses can have major tax implications that may make you think twice.

TaxBalance can provide assistance and guidance on these matters.

05

Don’t Try To Overclaim

There can be confusion over what can be claimed as a business expense because, for farmers especially, household expenses can easily get mixed in with business costs.

Things like private use of motor vehicles, and appropriate levels of deductions for home expenses, electricity.

  

 

Selling the Farm.

You may make a capital gain or capital loss when you sell (or otherwise cease to own) a working farm. Capital gains are subject to capital gains tax (CGT), with a discount for individuals and trusts. If your home is part of the working farm, you may be eligible for a partial main residence exemption. There are also concessions for small businesses with an aggregated annual turnover of less than $2m which meet certain eligibility criteria. These are:

  • Small business 15-year exemption - If your business has owned the farm for 15 years and you are aged 55 years or over and are retiring, or if you are permanently incapacitated, you may not have an assessable capital gain when you sell the farm.
  • Small business 50% active asset reduction - You may be able to reduce the capital gain on the disposal of your farm by 50%.
  • Small business retirement exemption - A capital gain from the sale of your farm may be exempt up to a limit of $500,000 if you retire. You may also be able to access this concession if you are under 55 provided you pay the exempt amount into a super fund.
  • Small business rollover - If you sell a small business asset, you can defer your capital gain until a later year if you rollover the gain into a replacement asset.

What to Bring.