Investment Allowance – Where to now after June 30 2009

We haven’t seen a June 30 like the one we just had since the advent of the GST. It was a good old fashioned end to the financial year with deals still being processed at midnight by most of the lenders. The stimulus created by the investment Allowance certainly had the desired effect and those eligible businesses that got in before the deadline can now benefit when their tax returns are completed.

If your business has a turnover in excess of $2.0 million per annum, then you will be able to claim a 10% tax deduction on all eligible assets over $10,000, brought between the 1st July 2009 and before the 31st December 2009, provided they are installed by the 31st December 2010.

Our business turnover less than $2.0 million p.a.

If your business has a turnover of less than $2.0 million p.a., you have until the end of this year – 31 December 2009 to order eligible assets and claim a 50% tax benefit provided that the goods are delivered before 31 December 2010.

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).

However, cars will not be disqualified from the allowance merely because they use the 12 per cent method.

Land and trading stock are excluded from the definition of depreciating assets, and will not qualify for the deduction.

Expenditures above the threshold which are capitalised into an existing asset as a second element of cost will also qualify for the deduction.

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