Small Business Measures – Asset Write off and accelerated depreciation

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From 7.30pm AEST on 12 May 2015 up to 30 June 2017, all small businesses (with an annual turnover less than $2M) will be permitted to claim an immediate tax deduction on any individual assets they start to use or install ready for use, that cost less than $20,000.

Individual Assets

This deduction applies on an individual asset basis and there is no limit as to the number of individual assets that the small business can apply to this concession. Qualifying assets used for running your business might include cars, utes, vans, motorbikes, trailers, lawnmowers, coffee machines, ovens, fridges, office equipment, photocopiers, carpets, tables and chairs, printers, tools, air-conditioning units, welding equipment, chainsaws, generators, pumps, solar panels, televisions, sound and security systems, computers, tablets and smartphones. The concession does not apply to stock you buy for your business.

Assets costing over $20,000 can be ‘pooled’ and depreciated at the same rate, 15% in the first income year and 30% in each subsequent income year. If the value of the asset ‘pool’ is less than $20,000, it can be immediately deducted until the end of June 2017. Most small capital purchases will be eligible for the new threshold, with the exception of assets that have specific depreciation rules, including in-house software and horticultural plants.

For this same two year period up to 30 June 2017, the Government has suspended the current ‘lock out’ laws for the simplified depreciation rules (which had prevented small businesses from re-entering the simplified depreciation regime for 5 years if they opt-out).

In addition, from 7.30pm 12th May, 2015 all primary producers will be entitled to an immediate deduction for capital expenditure on fencing and water facilities, such as dams, tanks, pumps and water towers. Further, fodder storage assets will be depreciated over three years. This will be a permanent change and represents a substantial acceleration of the current write off rules.

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