Claiming up to $20 000 immediate deduction
- Thread starter Burramys
- Start date
actually this works better if the asset being replaced is worth half (i.e. effective tax rate 50% in your own hands) of what you buy. the formula could be
existing asset / (1 - your tax rate) = what you should pay for a new asset to a maximum of $20k + GST
that needs modification tho as there is more upside than that
are you running a business or are you a passive investor?
No. Not a business. $300 limit applies which is far les than $20K. Page 16 of the bible
https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/ind39784n17290614.pdf
Business.....and construction about to begin on 3 x new townhouses.
Thanks for the link! "Intent" to run it as an ongoing business may not be enough.
so if you are a developer it's just part of your WIP anyway
A business of constructing ? Then its part of trading stock and not eligible.
Constructing then holding ?? ....Dangerous.
A business of investing ? Many many properties ? Maybe even a whole apartment block. And an ABN ? And CGT isn't a issue to you ? A business might not fall under CGT rules.
I would ask your tax adviser if they think your business would be eligible.
Constructing then holding ?? ....Dangerous.
A business of investing ? Many many properties ? Maybe even a whole apartment block. And an ABN ? And CGT isn't a issue to you ? A business might not fall under CGT rules.
I would ask your tax adviser if they think your business would be eligible.
No it's not like it scales. The minute it goes to $20,001 ...then the deal is off.
Correct -- There is more to it than that. Lets break it down. IMO I believe you can buy a vehicle that costs $25,880 PLUS Rego / CTP this side of 30 June if its a trade use vehicle, you are reg for GST + its not subject to a logbook and you meet all the small business tests.
One catch. It must be the SOLE asset acquired and held in the small business pool. If there are already assets a $20K cap would apply (excl GST). Or $22K incl GST !!
1. Say you pay $26,880 incl GST and Rego (ignore duty)
2. Deduct the $1k for rego
3. Less the 1/11th GST of say $2,353
4. Leaves $23,527 to add to the small business pool
5. Pooled assets are depreciated at 15% in year of addition. Deduction is $3,529
6. Since pool has fallen to $19,998 the pool satisfies the $20K write off at 30 June. Joe Hockey described this event in the budget speech and in the Treasury budget papers.
Art does depreciate according to the ATO effective life tables. Unless its a CGT asset (Monet etc)
Treasury and ATO have already come out and explained that businesses would be expected to use these assets in the course of their business to avoid a concern. ie Publically displayed, used in offices etc.
Of course if you are thinking of profiting remember sale of the assets generates a fully assessable amount since it has no book value. And no its not a capital gain. That really negates the deduction right ?
Is that amount including on road costs if you buy a car?
If you buy a car, is the $20000 ( ex GST ) including on road costs like registration, CTP, dealer delivery and stamp duty?
If you buy a car, is the $20000 ( ex GST ) including on road costs like registration, CTP, dealer delivery and stamp duty?
sure, publically displayed, then sold off at book value at some point in the future, or if fully written off then just scrap it
The legislation is being bought to Parliament this week. I believe the oppn don't oppose this change BUT if its contained in a bill that includes changes the ALP oppose then the whole lot could be stalled.
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