Simplified depreciation
The new rules relating to simplified depreciation have been effective from 1 July 2012 and provide significant advantages to small business enterprise taxpayers who are defined as carrying on a business and have an annual net turnover of less than $2 million.
These rules do not apply to rental property assets, low value pool and software development assets, capital works (property) and horticultural plants.
The rules provide for an instant write-off, increasing the threshold from $1,000 to $6,500. It is available on an asset basis (not an aggregate of similar assets). In regard to motor vehicles, there is an instant deduction of up to $5,000. The vehicle does not need to be primarily used for business purposes and the definition for a motor vehicle is very broad and does apply to second-hand motor vehicles.
For new and existing assets the depreciation will be claimed at a rate of 15% on the first year and the balance years will be a 30% (pool) balance. As 30 June approaches, it is important to consider whether you should be acquiring assets to take advantage of the simplified depreciation before 30 June 2013.
It is also very important that you do confirm with us that you qualify as your business turnover needs to be less than $2 million in aggregate.
For more information please call us on 02 9318 6400 or email fred.tortora@surrypartners.com.au