Case Study

Multi variety fruit farm operation purchased in 2021 for $3 million

Rural and Agribusiness Tax Depreciation

The details

  • 40-acre property with fruit farming operation
  • Five residences including houses and self-contained cabins
  • Five sheds including a packing shed with a large cold room, mezzanine floor for storage
  • Farm equipment and machinery

 

The approach

In this Capital Allowance and Tax Depreciation example the Quantity Surveyor prepared detailed schedules across all three methods – Prime Cost, Diminishing Value Methods & Small Business

Differing criteria, considerations and requirements apply to each method, along with the applied depreciation rate used against each asset group.

The method adopted that gained the owner maximum tax benefit was the Small Business Method.

Based on the preliminary estimate undertaken prior to the preparation of a full tax depreciation schedule, we were able to improve the expected maximum claim benefit return for the client.

The outcome

Undertaking an in-depth capital allowance and  tax depreciation assessment resulted in a first-year depreciation claim of $486,675, which boosted the net cash position of the operation by $146,003.

Within this the business recovered $89,590 in scrapping in the first-year claim.

No Tax Depreciation Claim Applied Tax Depreciation Claim $486,675 p/a Applied
Total Annual Income: ($163,073 p/m) $2,106,237 Total Annual Income: ($178,688 p/m) $2,106,237
Total Annual Expenses: ($1,824,457) Total Annual Expenses: ($1,824,457)
Cash Income minus Expenses $281,780 Cash Income minus Expenses $281,780
Tax Depreciation Claimed: $ – Tax Depreciation Claimed: ($486,675)
Pre-Tax Profit: $281,780 Pre-Tax Loss: ($204,895)
Tax Payable (@30%): ($84,534) Tax Refund (@30%): $61,469
Net Annual Cash Position: $197,246 Net Annual Cash Position: $343,249
Monthly After Tax Cash Position: $16,437 Monthly After Tax Cash Position: $28,604
The additional tax benefit per annum amounts to $146,003 ($12,167 per month)

Disclaimer: The tax depreciation amount within this case study relates to the first year claim and will vary depending on the method and asset allocations considered for tax depreciation. It will be different for each case and assessed on the business infrastructure, equipment/chattels and capital expenditure on the property recently

Why choose Acumentis

Have one point of contact for all your client’s property needs.

Knowledge and experience

Our registered team of professionally certified valuers are experts across commercialresidential and rural and agribusiness property types. We know what depreciable items to look for ensuring that you get a comprehensive ATO approved depreciation schedule prepared by our certified Quantity Surveyors.

Value

We’ll provide you with one tax depreciation schedule that lasts up to 40 years of claim and the fee is 100% tax deductible. We can also undertake a retrospective tax depreciation schedule if you haven’t been claiming deductions so that you don’t miss the tax benefits.

National reach

Wherever you are in Australia a qualified Acumentis property professional is nearby. With over 300 property professionals working from 45 offices in metropolitan, regional and rural Australia our team have your property and tax depreciation needs covered.

Your team of
tax depreciation experts

State contacts
Ernest van Zyl
Manager Property Advisory Services
Tom McDouall
Regional Director
Newcastle
Heath Craft
Valuer
Albury
Maria Ergos
Client Services Team Leader
Sydney Residential
Gregory Jordan
Valuer
Port Macquarie
Jack Prosser
Valuer
Port Macquarie
Louise de Savery
Senior Valuer
Newcastle
Harry Morrow
Valuer
Tamworth
Simon Mandile
Senior Valuer
Sydney
Emmanuel Ergos
Senior Valuer
Sydney
Justine Franklin
Valuer
Albury - Wodonga
Adam Scerri
State Director - Residential
Sydney
Amy Frankel
Regional Director
Port Macquarie
Matt Wilson
Senior Valuer
Cairns
Sarah Banner
Director - Valuations | Residential
Brisbane
Clancy Miller
Valuer
Townsville
Paul Krause
Senior Valuer
Mackay
Jack Macdonald
Senior Valuer
Roma
Ernest van Zyl
Manager Property Advisory Services
Thomas Hewitt
Associate Director
Brisbane
Henry Brown
Associate Director
Brisbane
Richard Holles
Senior Valuer
Toowoomba
Hannah Cooley
Valuer
Toowoomba
Zac Beveridge
Valuer
Toowoomba
Wayne Airey
Associate Director
Sunshine Coast
Will Smallacombe
Senior Valuer
Cairns
Alexandra Doneley
Senior Valuer
Emerald
Geoff Duffield
State Director Residential QLD
Brisbane
Jany Pezard
Director - Valuations
Sunshine Coast
Gareth Turner
Senior Valuer
Brisbane
Jim Lyons
Director Valuations
Brisbane
Lachlan Dunsdon
National Director Rural & Agribusiness
Brisbane
Mark Robins
State Director SA
Adelaide
Leon Sleiters
Valuer
Hobart
Harry Chapman
Valuer
Launceston
Harry Chapman
Valuer
Launceston
Tyrone Tweddle
Valuer
Hobart
Joe Stansfield
Regional Director - Tasmania (North)
Launceston
David Duffield
Regional Director - Tasmania (South)
Hobart
Nick Funnell
National Director - Asset Advisory
Melbourne
Rosheen Stephenson
Regional Director
Gippsland
Mark Pastor
Associate Director
Melbourne
Damien Stone
State Director Residential Victoria
Melbourne
Felicity Graham
Senior Valuer
Bunbury
Brandon Prince
Valuer
Perth
Curtis Borszeky
Valuer
Perth
Rachel Kendall
Valuer
Mandurah
Michael Sinclair
Valuer
Perth
Yury Bonne
Valuer
Perth
Dean Munns
Associate Director
Perth
James Sholdas
Associate Director Valuations
Perth
Tom O’Sullivan
Associate Director Valuations
Perth
Kate Bingham
Associate Director
Perth
Tony Gorman
Director Valuations
Perth
Ben Lamers
Director Acumentis Advisory
Perth
Aaron Hughes
Regional Director
South West WA
Scott Robinson
Regional Director
Mandurah
Richard Graham
State Director Rural & Agribusiness WA
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Blake Lieschke
State Director Residential WA
Perth
Nathan King
National Director – Advisory, State Government & Projects, State Director – WA
Perth
Ernest van Zyl
Manager Property Advisory Services
Tom McDouall
Regional Director
Newcastle
Heath Craft
Valuer
Albury
Maria Ergos
Client Services Team Leader
Sydney Residential
Gregory Jordan
Valuer
Port Macquarie
Jack Prosser
Valuer
Port Macquarie
Louise de Savery
Senior Valuer
Newcastle
Harry Morrow
Valuer
Tamworth
Simon Mandile
Senior Valuer
Sydney
Emmanuel Ergos
Senior Valuer
Sydney
Justine Franklin
Valuer
Albury - Wodonga
Adam Scerri
State Director - Residential
Sydney
Amy Frankel
Regional Director
Port Macquarie
Matt Wilson
Senior Valuer
Cairns
Sarah Banner
Director - Valuations | Residential
Brisbane
Clancy Miller
Valuer
Townsville
Paul Krause
Senior Valuer
Mackay
Jack Macdonald
Senior Valuer
Roma
Ernest van Zyl
Manager Property Advisory Services
Thomas Hewitt
Associate Director
Brisbane
Henry Brown
Associate Director
Brisbane
Richard Holles
Senior Valuer
Toowoomba
Hannah Cooley
Valuer
Toowoomba
Zac Beveridge
Valuer
Toowoomba
Wayne Airey
Associate Director
Sunshine Coast
Will Smallacombe
Senior Valuer
Cairns
Alexandra Doneley
Senior Valuer
Emerald
Geoff Duffield
State Director Residential QLD
Brisbane
Jany Pezard
Director - Valuations
Sunshine Coast
Gareth Turner
Senior Valuer
Brisbane
Jim Lyons
Director Valuations
Brisbane
Lachlan Dunsdon
National Director Rural & Agribusiness
Brisbane
Mark Robins
State Director SA
Adelaide
Leon Sleiters
Valuer
Hobart
Harry Chapman
Valuer
Launceston
Harry Chapman
Valuer
Launceston
Tyrone Tweddle
Valuer
Hobart
Joe Stansfield
Regional Director - Tasmania (North)
Launceston
David Duffield
Regional Director - Tasmania (South)
Hobart
Nick Funnell
National Director - Asset Advisory
Melbourne
Rosheen Stephenson
Regional Director
Gippsland
Mark Pastor
Associate Director
Melbourne
Damien Stone
State Director Residential Victoria
Melbourne
Felicity Graham
Senior Valuer
Bunbury
Brandon Prince
Valuer
Perth
Curtis Borszeky
Valuer
Perth
Rachel Kendall
Valuer
Mandurah
Michael Sinclair
Valuer
Perth
Yury Bonne
Valuer
Perth
Dean Munns
Associate Director
Perth
James Sholdas
Associate Director Valuations
Perth
Tom O’Sullivan
Associate Director Valuations
Perth
Kate Bingham
Associate Director
Perth
Tony Gorman
Director Valuations
Perth
Ben Lamers
Director Acumentis Advisory
Perth
Aaron Hughes
Regional Director
South West WA
Scott Robinson
Regional Director
Mandurah
Richard Graham
State Director Rural & Agribusiness WA
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Blake Lieschke
State Director Residential WA
Perth
Nathan King
National Director – Advisory, State Government & Projects, State Director – WA
Perth

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