How to Become Classified as A Primary Producer/Alpacas

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Member for

1 month 4 weeks
Last seen: 02/01/2019 - 11:04
Joined: 12/20/2018 - 11:31

How to Become Classified as A Primary Producer/Alpacas

Hi Everyone! First time poster, here. We've recently purchased 136acres of land near Maleny, Queensland. The land is heavily sloped and has access to a permanent creek. Previously (>10yrs) ago there were 100 head of cattle on the property. We are faced with a significant task of pasture regeneration, as the owner who was here for the last 8 years did not access any part of the property but the front yard. We've recently gone to an accountant to obtain ABN and GST number and have the intention of breeding Alpacas and establishing some Bed and Breakfast type cabins on the property. We've dropped both of our day jobs to casual in an effort to get the time to put into establishing this business. When can we begin to claim the tax benefits of being a primary producer? We have already sunk a significant amount of personal capital into the purchase of land and farming equipment such as tractor and UTV. We need to clear lantana and do a lot of weed control before we put stock on the property. Can we claim these benefits as we are undertaking pasture regeneration, or do we need to have our stock on the property first? I've been everywhere online and it is all very confusing. I'm currently undertaking a farm management course online and hope to establish a farm management and business plan in the next few months. Any advice or contacts that can be offered for guidance and mentorship relating to the tax considerations and/or where to begin with pasture regeneration would be greatly appreciated.
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Last seen: 02/19/2019 - 18:14
Joined: 02/28/2011 - 14:19

Hi Char,

Welcome to the small farm forum, great to have you as part of the community.

When you are starting out it definitely can be a confusing time, please see my response below.

You are able to claim the GST back from the purchase of any farm related expenditure from the date of registration for GST. It isn’t a requirement that they have any livestock as the business is operational from the day they obtained their ABN and started work on the property. Hopefully they also applied for  Fuel Tax Credits as well. If you buy fuel for the tractor or UTV and use it on the property they can claim that back in each Business Activity Statement they do.

At the end of the financial year if you have a loss on the farming business you may be able to claim those losses against their other income under a number of circumstances. These are detailed under  “Non Commercial Business Losses” on the ATO website. Even if the current years losses aren’t able to be offset against their current years other income they will be deferred forward to future years until they can be offset.

Given you have already been to an accountant to register for their ABN and GST, you should go back and have a further discussion regarding this question. It can be a confusing area for start up businesses, there are a number of different tests available to claim those losses and professional advice should be sort.

I hope this advice is of assistance.

Thanks,
Allan

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