Guidelines for approval of land management plans under division 40-670 of the new Business Tax System (Capital Allowances) Act 2001
1. Plan preparation
Once a decision has been made to construct a fence according to land class in order to prevent land degradation, a land management plan will be required to make a claim for deduction under Division 40-670
- it is not necessary to have an approved plan for other fencing deductions.
Anyone can prepare a plan (although it is advisable to obtain independent expert advice on identifying or confirming land classes on the property).
A land management plan should consist of a document comprising a drawing, aerial photograph, satellite image or other form of map at a scale suitable for farm planning.
The plan must show:
- different land classes
- the location of the proposed fencing that is required to prevent land degradation
Supporting documentation must briefly describe:
- the different land classes
- the kind of fence to be erected
- how the fencing will prevent land degradation.
If land resource information is not available for an area at a suitable scale, then a plan must be prepared for approval using sound land management planning principles and survey techniques.
2. Plan approval
Once a plan has been prepared it needs to be approved by an authorised officer of a State or Territory land conservation agency, or a farm consultant approved by the Secretary of the Department of Agriculture, Fisheries and Forestry or delegate.
Approval certification must be either a stamp or paragraph containing the following words:
"The following fences as identified on the attached land management plan are approved as meeting the eligibility requirements for claim under Division 40-670 of the New Business Tax System (Capital Allowances) Act 2001 "
NAME: .................. SIGNATURE: ......................
REGISTRATION NO: ......... DATE: / /
The certification must be clearly signed and dated on the appropriate map (and attachment if applicable).
Note: Farm consultants will be approved by the Department of Agriculture, Fisheries and Forestry and assigned a registration number, which will be valid subject to review.
State and Territory agencies are responsible for authorising their own officers and members of relevant statutory bodies to approve plans, and providing updated lists of authorised officers to the Commonwealth.
If an authorised officer or approved farm consultant prepares the plan no further approval is necessary (provided there is no conflict of interest such as would occur when an individual prepared a plan for their own landholding).
3. Construction of fences
The fence should be constructed as close as practicable to the fence line shown on the approved plan.
4. Claim for taxation
Total expenditure (100%) on the fencing may be claimed in the year of expenditure.
5. Maintenance of records
The approved plan does not need to be produced with the tax return but should be retained by the landholder for possible future auditing by the Australian Taxation Office.