Dinner in Restaurant

Tax Planning for Farmers

Ian Mortley and myself give a high-level overview of tax planning topics for farmers.


General tips

  • Cash flow management, ensuring you have the cash to pay your tax assessment when it falls due

  • Asset protection - sheltering your core assets from activities that may expose them to litigation

  • Capital gains tax planning and succession planning - ensuring the assets are held in structures that allow intergenerational asset transfer without triggering COT.

2022 tax planning tips

  • Timing of asset purchases - taking advantage of the instant asset write off but being aware that the asset must be installed ready for ready before 30 June - watch for supply chain disruption - treated on income account upon sale

  • Investing in farm improvement - pasture, fencing, water control - not as likely to be affected by supply chain disruption - treated on capital account when sold

  • Requires planning given recent supply chain problems

  • Timing of revenue recognition - timing cattle sales to defer the income recognition and, therefore, the tax. This requires herd management

  • Timing of expenditure - bringing expense and, therefore, the deduction into the current tax year

  • Farm management deposits

  • Averaging

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