For many in the horse industry tax planning finances are a restriction on their dream. Although not the priority we are all aware of the need for funds to appropriately care for our horses. Nobody wants to miss out on tax deductions.
The equine industry plays a significant part in the Australian Economy. Therefore the government provides incentives to promote investment. So lets consider if we might be able to benefit from the tax regime.
2017 year Horse Industry Tax Planning
The 2017 financial year is fast heading towards a close. So it is time to consider any opportunities that might exist. The equine industry plays a significant part in the Australian Economy. Therefore the government provides incentives to promote investment.
Government incentives have recently aimed at stimulating investment. They are also available to assist with the uneven cash flow inherent to the horse industry (and primary production generally). As such many incentives surround capital investment. At Bounce Back (R) Horse Fence we monitor incentives that may be available for our customers for horse fencing. There are two areas in which an immediate write-off is available for horse fencing (as well as other capital expenses).
Small Business tax incentives in the Horse Industry
If you qualify as a small business in Australia you may be eligible for an immediate tax deduction for capital expenditure. To claim you must be a “small business” for tax purposes. However it is available for a broad range of capital expenditure. This often referred to as the “ute” or small car incentive. If the assets are acquired before 30 June 2017, and costs less than $20,000 an immediate write-off might be claimed. There are some criteria to satisfy however this claim is simply made by your tax agent in your annual return. This is a government incentive looking to boost small business and therefore simply claimed and low risk. For more details see Australian Taxation Office – Small Business Write-offs.
Fencing and Fodder Storage – Primary Production Business
This incentive is open to a broader range of organisations within the horse industry. However it relates to certain types of capital expenditure. Certain write-offs can be claimed for both fencing and fodder storage.
Firstly since 12th May 2015 primary producers can claim 100% for expenditure on fencing. This can be a significant incentive in the good years to get you horse fencing up to scratch and save some tax$. Fencing projects take time to plan and complete. So to get your tax deduction this year you need to get started now.
Secondly there is a write-off for Fodder Storage Assets that would otherwise be included in the capital cost of the property. This incentives is available to help primary producers prepare for drought and lean periods.
For more information on 100% write-offs for fencing available for primary producers see Australian Taxation Office – Primary Production.
Please note: The article “Horse Industry Tax Planning 2017” is not intended to be tax advice and all interested parties are advised to contact their advisor for specific advice for their customers. Our intent is to advise the horse industry on some tax planning opportunities that may exist. It is up to the reader to seek out their own advice.
Geofrey Smith is the Business Development Manager of Bounce Back ®Horse Fence. Bounce Back ® is wholly Australian owned and is manufactured exclusively in Sydney. He has overseen the development of the product, its marketing and the launch of www.fencing4horses.com.au.
He is married with three children and lives in Sydney.
The information provided is a suggestion only. This information is general only and it is up to the individual to ensure they use the correct fencing method suitable to their situation. Acacia Products will not assume responsibility for design choice by the installer. If unsure it is recommended that the owner of the property seek further advice through an approved Fencing Contractor. The views described in this article are of the individual and not the company. Always seek specific advice and consider you application carefully.