The Investment Allowance provisions are now law. Make sure you act now to maximise your bonus deduction.

Background

You may have already heard about the Small Business and General Business Tax Break also referred to as the temporary investment allowance (“t...Read more

Eligibility

To qualify for the allowance, the following conditions must be satisfied: The investment must occur between 13 December 2008 and 31 December 200...Read more

New Investment Threshold

To qualify for the allowance, the investment amount must exceed the relevant new investment threshold. The new investment thresholds are: $1,000...Read more

Tax Planning Opportunities

The following may serve to assist taxpayers to get the maximum benefit from the allowance: For eligible assets, can these be installed ready for...Read more

Other Considerations

Some other considerations include: Are you claiming the R&D tax concession on depreciating assets? Interestingly, the allowance is also availabl...Read more

Disclaimer

The material in this article is for the benefit and information of clients. The items are in the nature of general comments only, and are not to be...Read more

Investment Time

To be eligible for the allowance, an investment in an eligible asset needs to be made between 13 December 2008 and 31 December 2009 ("the investment time"). A taxpayer is considered to have made an investment in an eligible asset where they: Entered into a contract under which they hold the as...Read more

Eligible Assets

To be eligible for the allowance, the asset must be a tangible ‘depreciating asset’ for which a deduction is available under section 40-25 of the Income Tax Assessment Act 1997. There are prescriptive rules to determine who is entitled to a deduction. However, this is generally the ta...Read more

Principal Use and Put to Use

Principal Use The allowance will not be reduced for any non-business use of the asset. However, a taxpayer must be able to demonstrate that at the time they started to use the asset or had it installed ready for use, the asset was to be principally used in Australia and for the principal purpose...Read more

Claiming The Allowance

The income year that the allowance can be claimed and the rate to be used in calculating a taxpayer's bonus deduction depends on when the new investment is undertaken and when the new or modified asset is put to use. Small Business Entity A small business entity is entitled to a 50 per cent bon...Read more

Act Now!

Now that the investment allowance rules are law, there is only a short time to act to take advantage of these generous concessions. For small business entities, the key cut off date for making an investment is 31 December 2009. For all other entities to be entitled to the 30 per cent deduction,...Read more