TAX PLANNING??? Time to take advantage of the
08-04-2009

TAX PLANNING??? Time to take advantage of the
“30% INVESTMENT ALLOWANCE”

ALL NEW MACHINES

ASK YOUR ACCOUNTANT TODAY!

Government releases temporary investment allowance exposure draft

The government has released an exposure draft of legislation to implement the temporary 30% investment allowance for small business. The proposed tax relief was announced on 3 February 2009 as part of the government’s Nation Building and Jobs Plan.

Under the proposal, small businesses may claim a one-off tax deduction equal to 30% of the capital cost of eligible equipment, including motor vehicles. This is in addition to the standard depreciation claimed for such assets. Businesses other than small businesses may also claim the one-off tax deduction but a higher expenditure threshold applies. Key features include:

the deduction will only be available on purchases of eligible new depreciating assets (including motor vehicles) but not used assets

relevant expenditure must be incurred between 13th December 2008 and 30th June 2009

for small business taxpayers, the cost of the asset must be more than $1,000.

for other businesses, the cost must be more than $10,000the asset must be ready for use and installed by 30th June 2010.

A 10% investment allowance will be available for eligible assets acquired from 1 July 2009 to 31 December 2009 where they are used or installed by 31 December 2010.

The tax break has been referred to in a number of ways, including as the “small business and general business tax break”, the “bonus tax deduction” and the temporary “30% investment allowance”. The Treasury is seeking submissions on the exposure draft legislation, called the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 by the close of business on Tuesday, 10 March 2009.

The exposure draft legislation and the explanatory materials, including a paper with “frequently asked questions” are available from the Treasury website

(www.treasury.gov.au).

Please note: that this is not to be considered tax advice and you SHOULD consult a qualified accountant to determine financial suitability.