Question:
Primary production land tax exemption refused: NSW
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
The NSW Court of Appeal has refused a claim for the primary production land tax exemption made by a couple for their property that was used for thoroughbred horse breeding.
The couple claimed that only 5% of the land was used to rent out a residence on the property and accordingly, the overwhelming majority percentage of the land was used for primary production.
However, in an earlier decision, the NSW Administrative Decisions Tribunal decided that only a small number of horses were ever present on the land and that primary production activity was minimal and accordingly, the residential rental activity was the dominant use of the land. The Appeals Court upheld the Tribunal decision knocking out the land tax exemption claim for the 2007 through 2011 land tax years.
In claiming the primary production land tax exemption, care must be taken that there is indeed a primary production business being carried on. The business must have sufficient scale, organisation, repetition and profit motive.
Ferella & ANOR v Chief Commissioner of State Revenue [2014] NSWCA 378
WTB 2014/49/1627
Andrew and Tony Lovett
5 December 2014
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