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Tax Depreciation Case Study - Two Cattle Grazing Farms

The Quantity Surveying service offered by Acumentis has gained strong momentum in assisting investor clients maximise their full potential of taxation refund on their residential or commercial investment properties. 

Of particular note, we have provided many farmers in the regions with an accurate assessment of their property’s depreciation and it’s been very rewarding for this to then translate into cashflow benefits which are of great assistance to owners of high-end rural property. 

Acumentis recently undertook a tax depreciation assessment on two cattle grazing farms, operated by one farmer. The farms feature two homesteads and two foreman houses with the following assets and infrastructure:

  • Dams, bores, windmills, river water and underground piping/reticulation points
  • Two cattle yards supported by crushes, ramps, and infrastructure
  • Various sheds, workshops and storage facilities
  • Fuel/water tanks, spread over key access points, including various water troughs
  • Solar systems, electric fencing, pumps and other services
  • Various landscaping in and around homesteads including a spa, pool, and other amenities.

The farmer, through undertaking a Tax Depreciation Assessment, was able to generate major tax savings which would have a significant positive cash flow impact on his going concern by applying this against his taxable income. The Method applied in this particular case by the accountant was the Small Business Forecast Method. The total depreciation benefits are as follows:

  • Total Farm/s Purchase Price: $2,077,000
  • Total Tax Depreciation Benefit (40 years): $1,445,869
  • First Year Total Depreciation Claim: $ 372,042
  • Five Year Total Depreciation Claim: $557,221

The depreciation method applied in each case will be determined by the tax accountant in conjunction with the owner.

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