Primary Production Tax Issues
Introduction and Overview
Primary production is a strong contributor to the Australian economy and plays a key role in the social, economic and environmental sustainability of regional Australia. The economic fortunes of primary producers are significantly influenced by the fluctuations in the prices of farm output and the challenges to sustainable production brought about by the climatic extremes of drought and floods. To ensure that agribusiness operations achieve sustainable growth and optimum commercial outcomes, primary producers rely on relevant professional accounting and tax advice.
- Primary production receipts - Are they assessable and if so, when? The amount and character of primary production receipts can vary significantly from year to year while the timing of recognition of income amounts will generally depend on the nature of the primary products being produced or the nature of the contractual arrangement. This session will provide guidance on:
- Recognising, classifying, smoothing, deferring, averaging and distributing a whole range of primary production income streams.
- Primary Production Expenses - Are they deductible and if so, when? The capital intensive nature of agribusiness places significant importance on the availability of capital allowances and accelerated deductions. This session will:
- Review the tax principles associated with undertaking an apportionment of the sale or purchase price of an agricultural property
- Identify issues to consider when determining the deductions available for capital outlays on water facilities, fencing assets and fodder storage assets under Subdivisions 40-F and 40-G.
- Disposing of Primary Production Assets - The Capital Gains Tax Issues. Understanding the impact of tax on the disposal or transfer of primary production assets is critical to ensure that the value of the business is not diminished by the imposition of tax that could have been avoided, by good planning. This seminar will provide an opportunity to review the operation of the small business CGT concessions and the application of GST to the disposal of primary production assets with particular reference to the disposal of land, structural improvements, trading stock, depreciating assets and other intangible assets in the context of a consideration of connected entities, affiliates, active assets and the maximum net asset value test.
Benefits and Outcomes
The primary learning objective of this seminar is to provide participants with an advanced understanding of the tax issues applicable to primary producers and their business operations.