Farmers urged to consider tax planning to save tax come 30 June
9 June 2011
The Advisory Board of Agriculture (ABA) is urging growers to be prepared for the end of the financial year with adequate tax, succession and superannuation planning.
Richard Murdoch, chair of the Advisory Board of Agriculture and President of the Agricultural Bureau of SA says that “in comparison to the past five years, the 2010 / 2011 season saw farmers receiving higher yields and better returns. While this is extremely positive, it does have implications for tax”.
Having a higher taxable income for 30 June 2011 means growers should be prepared ‘now’ to ensure they do not pay more tax than they have to.
One of the Agricultural Bureau’s sponsor organisations RSM Bird Cameron’s Director, Mr Brenton Scott, has indicated there are a number of options which primary producers can use to average out their income.
“Tax planning is just one of the management tools growers should be using to improve their business, growers should also consider incorporating this with succession planning and superannuation management” said Mr Scott.
Farmers should be creative when addressing their 2011 tax and consider the following points leading up to 30 June:
- Farmers should investigate the possibility of reducing their taxable income or defer it to next year with the objective that ‘tax deferred is tax saved’.
- Tax planning can be utilised with succession planning to both reduce tax payable and provide for retirement.
- Farmers should assess how they have structured their succession plan and ensure they have left enough assets to support them in retirement as typically farming assets are passed to the next generation leaving the older generation with insufficient funds to support retirement.
- Superannuation can be used to remove or at least significantly reduce any capital gains tax implications of succession planning or sale of assets.
- Superannuation can be used to provide a source of tax free income which significantly aids cash flow and supports a better lifestyle in retirement. This also takes the pressure off the need for the farming business to provide support in retirement.
“Regardless of the options, there are many opportunities to defer and ultimately save tax by undertaking planning matters now. Once the tax is paid it is gone forever” said Mr Scott.
While many farmers indicate they do not fully understand the ins and outs of tax Mr Scott suggests that “the key is to be aware and informed of what your taxable income is”.
Mr Scott believes all growers should be prepared for tax time and have up to date financial information, seek advice if required and to always spend money wisely!
The Advisory Board of Agriculture (ABA) is the Agricultural Bureau's governing body. Made up of representatives from the Bureau regions, government departments, the University of Adelaide and Women in Agriculture and Business, it provides policy advice and recommendations on agricultural matters to the State Government, runs farmer relevant projects and runs scholarship and bursary projects to support young people in agriculture plus recognise excellence in the industry.
For media enquiries contact:
Mr. Richard Murdoch
C/- GPO Box 1671, ADELAIDE SA 5001
Ph: 0419 842 419
Email: tuckokcowie@internode.on.net
Or
Brenton Scott
RSM Bird Cameron
Ph: 08 82323000
Email: Brenton.scott@rsmi.com.au
Web: www.rsmi.com.au
