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Are you aware of the new taxable asset write-off scheme?

New taxable asset write-off scheme
Greg Goudie
Written by Greg Goudie
The $20,000 write-off announced in the May Federal Budget, allows small businesses (those with an annual aggregated turnover of less than $2 million, including sole traders) to claim an immediate deduction in the year that the asset is first used or installed ready for use in their business.

If your business is GST-registered, the write-off threshold is the GST exclusive cost of the asset. The threshold is applied on an asset-by-asset basis. Even where the assets purchased are identical or form part of a set, each is entitled to its own $20,000 threshold.

DOES FBT LIABILITY HAVE ANY IMPACT ON THE TAXABLE PURPOSE PROPORTION?

Use the following table to assess the FBT impact:

ASSET SUBJECT TO FBT? TAXABLE PURPOSE PROPORTION IS…
Yes 100%
No Based on business usage

EXAMPLE
Fred’s Panel Beating Pty Ltd acquires a ute for $15,000 (+$1,500 GST). The ute is used by Fred who maintains a log-book showing 60% business use. The private use will be dealt with as a motor vehicle fringe benefit under the FBT rules. Because the ute attracts FBT, the taxable purpose proportion is deemed to be 100%. As the cost is $15,000, the asset is eligible for the write-off. The amount of the write-off is $15,000, despite only 60% business use.

To continue reading http://taxreporter.com.au/articles/featured-articles/write-off-faqs-part-i

Source Taxreporter.com.au

 

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About the author

Greg Goudie

Greg Goudie

Greg Goudie is the Executive Director of DOME and following many years in the automotive parts manufacturing sector, has worked with mature age unemployed for the past 15 years.

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