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New rules for immediate write-offs

Small business entity (‘SBE’) taxpayers who choose to depreciate their assets under the simplified depreciation rules are entitled to an immediate deduction with respect to low-cost assets in the year they are first used or installed ready for use for a taxable purpose.

Thanks to recent changes, SBE taxpayers may be entitled to an immediate deduction in the 2019 income year for acquiring certain depreciating assets costing up to $30,000 (net of entitlement to GST input tax credits) for assets used or installed ready for use from 7:30pm AEST on 2 April 2019 until 30 June 2019.

Assets acquired prior to 2 April 2019 may also be eligible for immediate write-off, although the thresholds may be lower (e.g., the threshold is $20,000 for assets used or installed ready for use from 1 July 2018 until 28 January 2019, and $25,000 for assets used or installed ready for use from 29 January 2019 until 7:30pm AEST on 2 April 2019).

On top of this, for the first time, medium sized businesses (with an aggregated turnover of less than $50 million) may also be eligible to claim an immediate deduction for acquiring assets from 2 April 2019.

While helpful, these changes have complicated matters for the 2019 year, so please contact us if you need any help.

Also, remember that you need to do this for the right reasons and you still need to pay for the assets. Consider the following:

  • Is it something you need/ will use? In the end, it is your hard earned money you are using and you want to make sure it is in the right place
  • Are you buying the asset in the right entity?
  • Will it be installed and ready for use before 30 June?
  • Have you financed it in the best way?
  • Are you sure you are getting it for the right price or have you given into the advertising?

 

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