End of Financial Year Tax Planning for Farmers for 2025

As the financial year draws to a close, it’s the perfect time to review your farm’s finances and take advantage of the tax deductions and planning strategies available to primary producers.

Here are some practical tips to help you reduce your tax bill and ensure you are taking advantage of all the concessions available: 

IMMEDIATE WRITE OFFS & ACCELERATED DEPRECIATION 

Primary producers can claim accelerated depreciation on a range of farm improvements: 

• Fencing & Laneways – Fully deductible in the year of installation. 

• Pasture Renovation – Deductible in the year incurred. 

• Yards, Livestock Equipment, Farm Machinery, Tractors, Utes, Vans etc– If you are a ‘small business entity’ (SBE) and your aggregated turnover is under $10 million, you can deduct the full cost of assets under $20,000 under the instant asset write-off. The key is the asset has to be ‘installed and ready for use’ by 30 June 2025, so ensure it arrives before this date to get the deduction into this year.  

Note if the cost is over $20,000 threshold, the normal depreciation rules apply. Also note, buildings and other assets that are eligible for capital works deductions are not eligible for the instant asset write-off. 

• Fodder Storage – Fully deductible in the year of installation such as silos, hay sheds, storage tanks. 

• Water Facilities – Fully deductible in the year of installation. Water facilities include: 

• • dams, earth and underground tanks 

• • concrete, plastic and metal tanks and tank stands 

• • bores and wells 

• • irrigation channels and similar improvements 

• • pipes and pumps (including those used for fire-fighting) 

• • water towers and windmills 

• • extensions and improvements to any of these items. 

• • capital repairs to plant or structural improvements which are primarily for the purpose of conserving or conveying water. 

• • a new structural improvement, or an alteration, addition, extension or capital repair to an existing structural improvement, that is reasonably incidental to conserving or conveying water. Examples include a: 

• • • culvert 

• • • fence to prevent livestock entering an irrigation channel 

• • • bridge over an irrigation channel

• Horticultural Plants – Accelerated depreciation if the effective life is under 3 years. 

• Solar Panels – May qualify for energy efficiency funding and reduce your long-term electricity costs.  

LANDCARE OPERATIONS

Work that protects or improves the land—such as drainage, fencing, salinity control, animal pest control, erosion control etc.—may be immediately deductible under landcare provisions. 

TECHNOLOGY & EQUIPMENT

Laptops, tablets, and other tech used for farm operations are deductible. If used partly for personal purposes, only the business-use portion is claimable. 

UTILITIES INFRASTRUCTURE

High rural installation costs for electricity and phone lines may be written off over 10 years (if the cost is over $20,000 for Small Business Entities). 

INCOME AVERAGING

Farming is inherently unpredictable. Global market fluctuations, weather extremes, and economic shifts can lead to exceptional profits one year and significant losses the next. To help manage this volatility, the Australian Tax Office offers income averaging for primary producers. This allows farmers to smooth their taxable income over several years, aligning their tax obligations more closely with those of individuals earning a consistent income. 

FORCED SALES OF LIVESTOCK

If you’re forced to sell livestock due to drought, fire, or flood, you may be eligible to defer the profit to a future year, easing the tax impact. 

DOUBLE WOOL CLIPS

If you shear twice in one year due to natural events, you can elect to defer the income from the second clip to the next financial year. 

INSURANCE RECOVERIES 

Insurance payouts can be spread over five years, helping to manage large one-off income spikes. 

GOODS TAKEN FROM STOCK 

Livestock or produce used for personal consumption must be included as income at cost price or at the ATO’s standard values that they publish each year. Keep accurate records to ensure compliance. 

FARM MANAGEMENT DEPOSITS (FMDs)

FMDs allow you to set aside pre-tax income in good years and withdraw it in leaner years. Deposits are deductible up to $800,000, and withdrawals are treated as assessable income. Typically, you would withdraw them in low income years to help with cashflow, restocking or replanting. You have to be an individual, not a company or trust and your non–farming income has to be less than $100,000 in the year you make the deposit.  

CARRY FORWARD LOSSES

If your farm operates at a loss, you may carry forward that loss to offset future income or potentially receive a refund on prior tax paid. 

PLAN AHEAD WITH WLF 

End of Financial Year is the ideal time to meet with us to discuss how we can help you implement these strategies and ensure you’re making the most of available deductions. 

WLF Accounting & Advisory has a proud and longstanding history of supporting Tasmania’s rural and agricultural sector. With deep roots in the local community, WLF understands the unique challenges and opportunities faced by primary producers. From tax planning and succession strategies to business structuring and compliance, WLF provides tailored advice that helps farmers and agribusinesses thrive across generations.  

Click HERE to send us an enquiry.

IMPORTANT INFORMATION 

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser in conjunction with tax advice from us. Information is current at the date of issue and may change. 

Written By Paul Lyons, Partner