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.