The National Australia Bank is prompting farmers who are considering purchasing new farm equipment to act quickly to take advantage of the Government's vehicle and equipment investment allowance.

Khan Horne, NAB's general manager of agribusiness, said the investment allowance offered farmers and other agribusinesses an incentive to purchase new depreciating assets effectively at a discount.

Under the allowance, farmers receive a 30pc tax deduction on new depreciating farm equipment acquired or ordered by the end of the current financial year, and a 10pc deduction on equipment acquired or ordered between 1 July 2009 and 31 December 2009.

The allowance is applicable to most new tangible depreciating assets, which includes vehicles and equipment over $10,000 (or $1000 for small business taxpayers).

"The investment allowance should give farmers the confidence to plan positively and invest for the future," Mr Horne said.

"Despite many coming off difficult seasons, this allowance provides a unique opportunity to gain from the efficiencies that come with upgrading plant and equipment as well as achieving benefits in tax or interest rates."

In order to claim the investment allowance, farmers and agribusinesses can either pay cash for new vehicles and/or equipment, or fund assets by way of an Equipment Loan or Hire Purchase.

For leased assets, banks can claim the investment allowance and pass on the discount to customers through reduced interest rates.

Source: FarmOnline Daily