Farmers may be able to reduce their tax liability by up to a third under the Federal Government’s carbon tax package.
The package proposes increasing the tax-free threshold from $6,000 to $18,000 in 2013.
Because farmers are able to average their income over five years, on an income of $20,000 per year, the new regulations will mean the tax liability will move from $9,000 to about $6,000, a saving of 33 per cent.
Geoff Hall, WA agribusiness director for rural accountants RSM Bird Cameron, says there are also implications for farmers who put money aside in good years.
“Those farmers who have had Farm Management Deposits can hopefully look forward to, when they draw them out, paying a slightly lower tax rate than if they had drawn them out in the year they deposited the money.”
