Just after some info if anybody knows the ins and outs of how the logging industry and Aust tax laws work over here. I am soon to have commmercial loggers onto my land in Qld here to log what I estimate will be around the $50,000 worth of timber off it. There is some fairly substantial road works required for them to gain access for trucks etc, but they will cover the cost of this and take that cost out of the timber value. I have been told by my accountant that any money received from the logs whether it be $5000 or $50000 is taxable as part of my income, even though it is a 1 off operation. We have only owned the land for a few months. Do any of you know the ins and outs of how the tax laws work in relation to this. I can't get any cash $$ for the timber as no sawmills pay cash these days We don't live on the land being logged, but will soon have a tennant there. Is there anything I can do with machinery, fencing material, sheds etc to lower or avoid the tax side of it. It is a load of BS, we paid a crap load of stamp duty on the land when we brought it, you pay heaps of land rates each yer for nothing, there is no services within miles of the place, bitumen road ends 5km's up the road.:Banghead:Banghead:beatsme:beatsme:beatsme
To my mind this is a primary production activity and as a primary producer you would be subject to all the benefits and hindrances of that occupation. Your accountant is essentially correct but an accountant who is fully fluent in primary industry may be able to offset your liability. Surely your capital outlay for the property must come into it "if" you are a registered primary producer. I'd argue that you are de-valuing your property...or otherwise attracting a capital loss...but I'm no accountant....not by a long shot.
Thanks for the reply, no we aren't registered as primary producers as the block was purchased as a life style/ recreational use block/ long term investment sort of thing it's about 1000 acres, with the spin off being some decent timber to mill. I'll ask him about the primary producer and land devaluation thing when I go and see him next week. Cheers.
Ask your accountant , if the logger gives you a bill for $55,000 including GST for clearing . And then he gives you a receipt for $55,000 inc GST for payment in kind (the logs) the two GST components will cancel each other out with no money to pay . You will claim the $55,000 as improvements against your taxable income which will carry over as a loss for many years (a handy thing) . On edit , count your tree stumps against the load dockets . And always get any work done before they leave your paddock , you will never get them back otherwise .
if you dont like or distrust your accountants advice get a second opinion from another accountant, follow his advice as the fines /penalties are not worth cheating, a good example is glen wheatley, john farnhams manager, just out of jail for tax fraud.
Thanks guys I'll mention these things to him. I'm not trying to doge tax, it's just everything youo do and everytime you try and get ahead the tax man has his hand out over here, the harder you work, the more often the tax man sticks his hand out:Banghead:Banghead
The guys did say that any tree that is cut gets a stump number in order, so if I ever want to check things then I can follow the stump numbers against the log numbers, good thing is with the way the block is laid out i'll be able to see exactly where they have and haven't been and there are no freshly cut trees anywhere on the place.