The 'Small Business & Business Tax Break ' Bill was passed by both houses of Parliament on Thursday 14th May 2009.
Eligibility for the Investment Allowance is based on the turnover of the business acquiring the asset.
Important:The Investment Allowance is not a rebate entitling businesses to a cheque / money. It is the ability to claim a one-off tax deduction where the asset meets the appropriate eligibility criteria.
The claim may impact your financial position and subsequently the amount of tax you pay. Please discuss your individual situation with your accountant to determine how best to maximise the benefits of the investment allowance.
Businesses with turnover of less than $2 Million
Benefit: The Investment Allowance enables customers to claim an additional 50% Tax Deduction on equipment purchased between 13th December 2008 and 31st December 2009 and delivered / installed before 31st December 2010. The Investment Allowance applies to most types of new plant and equipment, including motor vehicles.
Please Note: Businesses with an annual turnover of less than $2M can only claim on equipment costing $1,000 or above.
Provided all of the eligibility criteria are satisfied, you can claim the Investment Allowance as a tax deduction in your income tax return for the income year in which you start to use an eligible asset or have it installed ready for use. The Investment Allowance provides a bonus tax deduction - it is not a rebate or a refundable tax offset.
Businesses with turnover of $2 Million or greater
Benefit 1: The Investment Allowance enables
customers to claim an additional 30% Tax Deduction on equipment
acquired
between 13th December 2008 and 30th June 2009 and delivered / installed before 30th June 2010. The
Investment Allowance applies to most types of new plant and equipment,
including motor vehicles.
Benefit 2: For eligible assets that are
acquired from 1st July 2009 to 31st December 2009, businesses can claim and additional 10% deduction where the goods are received by 31st December 2010.
Please Note: Businesses with an annual turnover of $2M or greater can only claim on equipment costing $10,000 or above.
Funding Treatments
Chattel Mortgage: There is no impact to Chattel Mortgage Facilities as title of the goods is passed to the borrower at purchase.
Hire Purchase:
As the borrower is considered to be the owner for tax depreciation purposes they are entitled to claim the Investment Allowance benefit
Lease: As the owner of the asset the lender currently claims the depreciation. The Bill confirms that a lender has the ability to claim the additional Investment Allowance. Where a Lease is requested a benefit will generally be passed to the borrower in the form of a lower interest rate and rentals.
Disclaimer: The above information has been provided by a third party and is current at 19th May 2009. Whilst every effort has been made to ensure the information is correct we can not guarantee this. Please check with your accountant before making any decision in relation to the above. This information will be updated if required.
