2013 amendments allow farmers an immediate deduction for riparian planting, planting beside waterways to help control run-off.

Sections DO 1 and DO 2 of the Income Tax Act 2007

The amendments allows farmers an immediate deduction for riparian planting

Background

Theoretically the Tax Act allows farmers a deduction spread over 45 years for riparian planting (planting beside waterways to help control run-off). In practice farmers were, we understand, generally taking an immediate deduction for such planting. Further, under the tax law before this amendment, the planting of trees for similar purposes was usually immediately deductible.

Key features

Section DO 2, which previously allowed farmers an immediate deduction for trees planted for erosion and shelter purposes, has been extended to also allow an immediate deduction for the planting of trees or plants for the purpose of:

  • preventing or combatting erosion;
  • providing shelter; and
  • preventing or mitigating detrimental effects of water run-off.

The heading to section DO 1 was consequentially amended.

Application date

The general application date is expenditure incurred from the start of farmers' 2011-12 income year, but there is a grandparenting provision such that claims already made from the commencement of the
2008-09 income year are also allowed.