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Under Australian tax law, quarry operations are entitled to claim on depreciation related to a building’s structure and on various items of plant and equipment.
Under Australian tax law, quarry operations are entitled to claim on depreciation related to a building’s structure and on various items of plant and equipment.
 










Why properties can be less taxing for quarry owners

Quarry operators each year may be missing out on reclaiming thousands of dollars in property and asset depreciation from the tax office.
At the end of each financial year, quarry owners/operators can unlock their cash flow potential through depreciation. This often results in thousands of additional dollars each financial year. Some owners/operators are unaware of the tax deductions they are entitled to.

“Research shows that 80 per cent of investors are failing to take full advantage of property depreciation and are missing out on thousands of dollars in their pockets,” says Bradley Beer, the director of BMT Tax Depreciation. “Depreciation is often missed because it is a non-cash deduction. The investor does not need to spend money to claim it.”

As a building and quarry assets age, they wear out; they depreciate in value. The Australian Taxation Office (ATO) allows owners/operators to claim this depreciation as a tax deduction. Depreciation can be obtained by any owner/operator who obtains income from their property (both commercial and residential investments) or plant and equipment.

WHAT CAN YOU CLAIM AS A DEDUCTION?
Depreciation related to a building’s structure can be claimed via capital works allowance. Deductions are based on the historical cost of the structure. As a general rule, any commercial property which commenced construction after 20 July, 1982 will be eligible for the capital works allowance.

Depreciation on each plant and equipment item can also be claimed. The depreciation deduction available on each item is calculated using the effective life set by the ATO. Some plant and equipment depreciable items commonly found on quarry sites can include:
•    Excavators, graders, wheel loaders, dozers and cranes.
•    Crushers, screening assets, feeders, grinding mills and conveyors.
•    Control systems, compressors, jigs, storage tanks, thickening assets, pipes and pumps.
•    Fencing, boom gates and portable buildings.
The effective life for transportable buildings is left to the accountant’s discretion and potential private ruling to determine final effective life. This example uses 20 years as the effective life.
The effective life for transportable buildings is left to the accountant’s discretion and potential private ruling to determine final effective life. This example uses 20 years as the effective life.
Claiming these depreciation deductions can make a big difference in a quarry owner’s cash flow, as illustrated in Table 1.

Operators who are aware of potential deductions are able to maximise their cash flow through their quarries and plant and equipment. Bradley Beer recommends that operators should consult a quantity surveyor who specialises in tax depreciation to unlock the cash flow potential of their investments.

So why not make the most of your operation this financial year by ordering a tax depreciation report before June 30 and claiming the fee straight back?

Source: BMT Tax Depreciation










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Monday, 16 September, 2019 6:25am
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