Private ruling: Business - deductions - accelerated depreciation for primary producers
Date of advice: 7 October 2015
Published: November 2015
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will the plant you intend to acquire satisfy the definition of 'water facilities' for the purpose of applying the immediate deduction available to primary producers under Subdivision 40-F of the Income Tax Assessment Act 1997 (ITAA 1997). | A1: Yes

Relevant facts and circumstances: You are investigating investing in plant for your primary production business. The plant would be beneficial to the business in that it improves water distribution to the paddocks and is considered to be a highly efficient system which will help to conserve water. The expenditure on the plant would be incurred during the 2015-16 income year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 40-F | Income Tax Assessment Act 1997 Subsection 40-520(1)

Reasons for decision: Summary: Legislation was introduced on 22 June 2015 allowing primary producers to immediately deduct expenditure relating to the cost of water facilities that is incurred after 7.30pm on 12 May 2015 (section 40-540 of the ITAA 1997). The term 'water facility' is defined in subsection 40-520(1) of the ITAA 1997 to include plant or a structural improvement, or a repair of a capital nature, or an alteration, addition or extension, to plant or a structural improvement, that is primarily and principally for the purpose of conserving or conveying water. We consider that the plant you are considering acquiring is an item of plant that is primarily and principally for the purpose of conserving or conveying water. Accordingly, the system will satisfy the definition of 'water facilities' for the purpose of applying the immediate deduction available to primary producers under Subdivision 40-F of the ITAA 1997.