Tax break ??

[moyjos]

The treasury has recently (Feb)announced a Small Business and General Business Tax Break.

To support jobs and Australian businesses – especially small businesses - the Government will fund an investment tax break for all Australian businesses.

This temporary business tax break will help Australian businesses boost business investment, bolster economic activity and support Australian jobs.

Businesses in Australia – especially small businesses - are the engine of the Australian economy and deserve direct support during a global recession.

This $2.7 billion Business Tax Break is a key element of the Government's $42 billion Nation Building and Jobs Plan to support up to 90,000 Australian jobs.

The Small Business and General Business Tax Break will mean;

A small business that buys and installs a $2,000 computer before the end of June 2009 can claim an additional $600 deduction in its 2008-09 tax return.
A business that buys and takes possession of a $60,000 backhoe by the end of June 2009 can claim an additional $18,000 deduction in its 2008-09 tax return.
Small businesses can claim an additional 30 per cent tax deduction for eligible assets costing $1,000 or more that they acquire from 13 December 2008 to 30 June 2009, and install by 30 June 2010.

For eligible assets costing $1,000 or more that they acquire from 1 July 2009 to 31 December 2009, they can claim an additional 10 per cent deduction where they are installed by 31 December 2010.

To benefit from this tax break a small business must have a turnover of $2 million a year or less.

NOW the trick here is "Eligible assests"

Eligible assets
The tax bonus will apply to tangible assets used in carrying on a business, for which a deduction is available under the core provisions of Division 40 (Capital Allowances) of the Income Tax Assessment Act 1997 (ITAA 1997).

Specifically, the deduction will be available for depreciating assets under section 40-30 that qualify for capital allowances under Subdivision 40-B, except for intangibles and rights that would otherwise be included by subsections 40-30(2), (5) and (6).

http://www.treasury.gov.au/documents/1487/PDF/Explanatory_Memorandum.pdf

Now the question I am awaiting from my accountant is.......Is the owner of an IP a "business" and as such are "depreciating assets" (carpet/blinds/screens/furniture etc) claimable with the extra tax deduction?
We sell blinds/screens and awnings

Keep an eye on this..it could a handy way to add some "improvements" to your IP

Cheers
Sue

 

[jaycee]

As a person who fills out a PAYE tax return as I have my investment in my own name, I would doubt I would be included.

 

[Buddybee]

I agree with jaycee regarding PAYG, however it poses a real interesting scenario for those who hold assets in different structures such as Company/Trust arrangements where 100% of the transactions through that entity are property related....

I will watch this thread with interest, and will be speaking with our accountant.

Cheers
Buddybee

 

[LynnH]

Sue

There was a tax ruling a few years back (can't remember the name of the case) which defined the business of owning IPs. The couple concerned owned a number of IPs in their own names and essentially ran them as a business (maintenance, property management etc was all done by them). So the answer to your 'question' is 'probably not'.

Perhaps one of our accountant forumites could provide the relevant details???

Cheers
LynnH