Guest Blogger Trevor Fair of Oxley Partners - Bowral
The 2015 Federal Budget has provided small business a significant tax deduction with the announcement of the $20,000 instant tax write-off for asset acquisitions. Eligible businesses must not only have an ABN, but also be actively trading, and the purchases must relate to the enterprise. The scheme allows businesses to acquire assets, either new or second hand which cost under $20,000 for each asset to be instantly written off in the year of acquisition.
The commencement date is from budget night until 30 June 2017, so this scheme can be taken advantage of before the end of this financial year. There is no limit to the number of assets which can be written off, however to get maximum benefit businesses should have taxable income which to offset the depreciation against. Further to this, if you use the correct structure to own the asset in the enterprise such as a chattel mortgage, via your finance broker, you can finance the asset over your standard five year term, yet take advantage of the instant depreciation write down immediately.
For equipment over $20,000 there is still the asset pooling option where the depreciation is 15% in the first year and then 30% in subsequent years.
The commencement date is from budget night until 30 June 2017, so this scheme can be taken advantage of before the end of this financial year. There is no limit to the number of assets which can be written off, however to get maximum benefit businesses should have taxable income which to offset the depreciation against. Further to this, if you use the correct structure to own the asset in the enterprise such as a chattel mortgage, via your finance broker, you can finance the asset over your standard five year term, yet take advantage of the instant depreciation write down immediately.
For equipment over $20,000 there is still the asset pooling option where the depreciation is 15% in the first year and then 30% in subsequent years.
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