Did you know that the Federal Government recently announced a significant tax incentive on storage assets for primary producers? This means farmers can now drought-proof their properties by instantly deducting the cost of fodder sheds rather than depreciating the shed over 3 years.
Fodder storage assets include structures like:
- Grain storage sheds
- Hay storage sheds
Your deduction is limited to capital expenses you incur for the construction, manufacture, installation or purchase of a fodder storage asset.
Am I Eligible To Claim?
You must meet the following criteria in order to deduct the full cost of a storage shed:
- The expense was incurred on or after 19th August 2018. If you incurred the expense before this date, it must have been first used or installed ready for use after 19 August 2018.
- The shed’s main use must be to store fodder.
- The fodder must be used in a primary production business on land in Australia (even if you are the lessee)
You must also claim the deduction in the tax year in which you incurred the expense.
How Much Can I Claim For My Shed?
Currently, sheds are depreciated over three years at $33,333 per year. That means primary producers can claim up to $100,000 as a tax deduction in a single year under the new scheme. The loss can be carried forward to offset future income if you don’t have a taxable income in the current financial year.
Where Can I Find Out More?
Head to the ATO’s Fencing and fodder storage assets for full details of the scheme and examples of how to claim. Contact All About Sheds, to start building your new fodder storage shed and take advantage of this initiative.