Tuesday 22nd April 2014

Claiming deductions for plant and equipment

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The repeal of the Mineral Resources Tax by the Federal Government has resulted in the scaling back of capital allowance concessions from 1 January 2014.

Business owners should make sure they are aware of the changes. The capital allowances for small business entities this year end is:

  • Small business entities would be able to claim a deduction for the value of a depreciating asset that costs less than $1000 (rather than the $6500 before 1 January) in the income year in which the asset is first used or installed ready for use
  • Small business entities would be able to claim a deduction for an amount included in the second element of the cost of a depreciating asset that was first used or ready to use in the previous income year
  • Small business entities would be able to allocate depreciating assets that cost $1000 (rather than the $6500 before 1 January) or more to their general small business pool and claim a deduction for the depreciation of the assets in the pool
  • Assets allocated to the general small business pool would depreciate at a rate of 15 per cent in the year they are allocated and a rate of 30 per cent of subsequent years and;
  • If the value of a small business entity’s general small business pool is less than $1000 (rather than $6500 before 1 January) at the end of the income year, the small business entity would be able to claim a deduction for the entire value of the pool.

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