Small business instant asset written off for asset under $20,000
2015 budget has been passed and small business owner can write off asset under $20,000 instantly.
Who is eligible?
Only small business is eligible for this instant written off, generally a small business is a business with aggregated turnover of less than $2 million.
When does it start?
This immediate deduction starts 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.
Is the $20K GST inclusive or exclusive?
If entity is registered for GST, then the cost of the asset is the GST exclusive amount.
If entity is not registered for GST, then the cost of the asset is the GST inclusive amount.
Are old/second hand assets eligible?
Yes, both new and old/second hand assets purchase can be written off under this new legislation.
What assets are eligible?
Basically all types of assets that are used to run a business are included, asset like following, but not limited to:
When can I claim deduction?
Deduction can only be claimed, when asset purchased is used by the business or is ready for use during that financial year. Simply place an order does not allow the deduction.
Questions:
How does the cost base of vehicle trade-in count?
If a new vehicle costs $26,000 and the dealer accepts to trade-in your old vehicle for $8,000, can I claim this vehicle under immediate deduction?
NO, the cost base of trade-in is the vehicle’s actual price, but not the after trade-in amount. This vehicle’s cost base is counted as $26K and can not be instantly written off.
How does it work for business asset with private usage?
If a business asset cost $30K, and it is used 50% for business and 50% for personal, because 50% of asset for business is $15K, so can this asset be written off instantly?
NO, it can not be instantly written off. When decide the application of this instant written off, the actual cost of asset must be considered, but not the business usage proportion only.
Should you have any inquiry regarding this instant written off, please feel free to ask.
Who is eligible?
Only small business is eligible for this instant written off, generally a small business is a business with aggregated turnover of less than $2 million.
When does it start?
This immediate deduction starts 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.
Is the $20K GST inclusive or exclusive?
If entity is registered for GST, then the cost of the asset is the GST exclusive amount.
If entity is not registered for GST, then the cost of the asset is the GST inclusive amount.
Are old/second hand assets eligible?
Yes, both new and old/second hand assets purchase can be written off under this new legislation.
What assets are eligible?
Basically all types of assets that are used to run a business are included, asset like following, but not limited to:
- Motor vehicles
- Tools
- Fittings (exclude capital works, like renovation)
- Machinery
- Furniture
- Hot water systems
- Water tank
- Appliances
- Computers/laptops
- Printers
- Air conditioning
- Forklift
- Security system
- Off the shelf software for business use (including in-house developed software exclusively used in its business)
- Horticultural pants
- Capital works
- Assets allocated to pool
- Primary production assets
- Assets leased out to another party on a depreciating asset lease
When can I claim deduction?
Deduction can only be claimed, when asset purchased is used by the business or is ready for use during that financial year. Simply place an order does not allow the deduction.
Questions:
How does the cost base of vehicle trade-in count?
If a new vehicle costs $26,000 and the dealer accepts to trade-in your old vehicle for $8,000, can I claim this vehicle under immediate deduction?
NO, the cost base of trade-in is the vehicle’s actual price, but not the after trade-in amount. This vehicle’s cost base is counted as $26K and can not be instantly written off.
How does it work for business asset with private usage?
If a business asset cost $30K, and it is used 50% for business and 50% for personal, because 50% of asset for business is $15K, so can this asset be written off instantly?
NO, it can not be instantly written off. When decide the application of this instant written off, the actual cost of asset must be considered, but not the business usage proportion only.
Should you have any inquiry regarding this instant written off, please feel free to ask.
