Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 1/18)
Character Range: 5429986–5432697

4                                    Long‑term averaging of some primary producers' tax liability (by tax offsets and extra income tax)                                   Division 392

Subdivision 385‑E—Primary producer can elect to spread or defer tax on profit from forced disposal or death of live stock

Guide to Subdivision 385‑E

385‑90  What this Subdivision is about

      You can elect to exclude from your assessable income the profit on a forced disposal or death of live stock that you held as assets of a primary production business you carry on in Australia.
      The excluded profit is then brought into your assessable income over a 5 year period in one of 2 ways.

Table of sections
385‑95 Basic principles for elections under this Subdivision

Operative provisions
385‑100 Cases where you can make an election
385‑105 Election to spread tax profit over 5 years
385‑110 Alternative election to defer tax profit and reduce cost of replacement live stock
385‑115 Your assessable income includes an amount for replacement live stock you breed
385‑120 Purchase price of replacement live stock is reduced
385‑125 Alternative election because of bovine tuberculosis has effect over 10 years not 5

385‑95  Basic principles for elections under this Subdivision
 (1) You can elect:
 to spread the profit on the disposal or death over the income year of the disposal or death and the next 4 income years (election to spread); or
 to defer including the profit in your assessable income, if you will use the proceeds of the disposal or death mainly to replace the live stock (election to defer).
 (2) If you make an election to defer, the profit is "used" over the next 5 income years:
 by reducing the amount for which you are taken to have bought replacement stock (as a result, your tax profit on the disposal of the replacement stock is increased); and
 by including in your assessable income amounts for replacement stock that you breed.
Any unused part of the profit is included in your assessable income for the fifth income year.

Operative provisions

385‑100  Cases where you can make an election
 (1) You can make an election if:
 (a) you dispose of *live stock, or they die, because:
 (i) land is compulsorily acquired or resumed under an Act; or
 (ii) a State or Territory leases land for a cattle tick eradication campaign; or
 (iii) pasture or fodder is destroyed by fire, drought or flood and you will use the *proceeds of the disposal or death mainly to buy replacement stock or to maintain breeding stock for the purpose of replacing the live stock; or
 (iv) they are compulsorily destroyed under an *Australian law for the control of a *disease or they die of such a *disease; or