Farm Tax and Planning Strategies From Sharp Accounting
With strong commodity prices and continued innovation in the agricultural sector, many agribusinesses are looking ahead to a positive 2024–25. While seasonal variation and cost pressures remain, proactive tax planning can help Victorian farmers maximise profitability and prepare for future challenges.
Here are a few key farm tax and planning strategies to keep in mind as we approach the end of the financial year.
Review the Structure of Your Farming Business
Is your farm business structured for success?
Common structures for Australian farms include partnerships, trusts, companies, joint ventures, and cooperatives. Each comes with tax implications, succession planning considerations, and varying levels of asset protection.
A well-considered structure should:
- Protect your assets
- Support effective succession and retirement planning
- Offer flexibility for profit distribution and tax planning
- Reflect your long-term business goals
If you haven’t reviewed your structure in the past few years—or if your circumstances have changed—it may be time for a health check.
Farm Tax and Planning Strategies for 2024–25
Livestock Selling Plans
Timing livestock sales can significantly impact your taxable income. With markets holding firm, a structured selling plan can help even out income across financial years or reduce the risk of triggering a large tax bill in a single year. Review your inventory and forward contracts to assess the best timing for sales based on projected profit and tax position.
Instant Asset Write-Off
Small businesses with a turnover under $10 million may be eligible for the $20,000 instant asset write-off in 2024–25. The threshold applies per asset, so multiple items under $20,000 each can be written off in full, provided they are installed and ready for use between 1 July 2024 and 30 June 2025 (subject to legislation passing).
This is particularly relevant for farm equipment like pumps, small machinery, and tools.
Primary Producer-Specific Immediate Deductions
Some valuable incentives remain in place for primary producers:
- Fencing – Immediate deduction for capital expenditure on fencing (no threshold or pooling required)
- Water Facilities – Includes dams, tanks, irrigation channels, and pumps; deductible in full in the year incurred
- Fodder Storage – Immediate deduction for silos, haysheds, and other fodder storage assets used to store feed for livestock
- Landcare Operations – Deductible expenses include soil conservation, weed and pest control, erosion prevention, and firebreaks
These deductions are available regardless of cost, provided the assets are used for primary production purposes.
Sharp Accounting: Strengthening Profitability in Agribusiness
At Sharp Accounting, we work with agribusinesses to build resilient and agile financial plans. We partner with you to plan for your profitable future, considering your longer-term succession plans and shorter-term tax minimisation planning.
Reach out if you’re looking for an accounting partner who knows agribusiness.
