Dave has bought a block of land and has spent $100k in purchasing 50,000 young Manuka trees and planting them. He intends to lease this to local beekeepers for Manuka honey production.
Can Dave claim anything for tax?
Well, there is a good case that the Manuka trees are defined as “non-listed horticultural plants” in subpart DO of the Income Tax Act and schedule 20. Thus, Dave can amortise the Manuka plants at 10% per annum, ie. $10,000 per year.
Alternately if Dave can show that some Manuka plants were planted for the purpose of preventing or combating erosion of the land (eg. maybe along gullies and steep ridges) he may be able to get an immediate write-off for these plants.
Dave should seek advice to ensure the best tax treatment is reached.
