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AAG Tax Health Check – For Businesses for 30 June 2020 – Part 2

Jun 19, 2020 | Accounting & Tax, Investments

TAX YEAR END – 30 JUNE 2020

 

The next article in our series on Tax Health Check for Businesses covers Plant and Equipment strategies.

 

 


TAX STRATEGIES PART 2: PLANT AND EQUIPMENT REVIEW

 

TAX ITEM EXPLANATION AAG TEAM
Plant and Equipment Increased
Instant Asset Write-Off (IAWO) Thresholds
Date asset first used
(or installed ready for use)
Small Business
[T/O less than $10 million]
Medium Business
[T/O $50 million]
Large Business
[T/O $50 – $500 million]
1 July 2019 –
12 March 2020
30,000 30,000 n/a
12 March 2020 –
31 December 2020
150,000 150,000 150,000
After 31 December 2020 1,000 n/a n/a

Note: Small businesses who wish to use the IAWO must use the small business simplified depreciation rules (i.e. small business pools.)

It is important to remember, that ordering an asset or paying for it prior to 31 December 2020 is not enough,you must also ensure the asset is delivered and installed ready for use by 31 December 2020 or you may lose the instant deduction.

For more information, please refer to our article on Vehicles and The Instant Asset Write-Off

CONSULTING
Plant And Equipment –
Accelerated Depreciation
Businesses with a group-wide turnover of less than $500 million will be entitled to accelerated depreciation on eligible assets purchased and first used (or installed ready for use) between 12 March 2020 and 30 June 2021.

Accelerated Depreciation means:
a) Immediate deduction at 50% of the cost of the asset; and
b) The remainder would be claimed under ordinary depreciation rules [i.e. the cost of the asset on which depreciation is calculated is reduced by the 50% amount claimed at (a)].

Note: If you use the Small Business General Pool for assets costing above the Instant Asset Write-Off thresholds (listed above), you can claim 57.5% during the year the asset is purchased, and the asset would continue to be depreciated at 30% in the following years.

CONSULTING
Plant And Equipment
Write-Off
Review your asset register and write off any assets that have been disposed or are no longer in use. CONSULTING

Please email us at consulting@austasiagroup.com if you have any queries.

We will be in touch again in the new financial year to discuss your specific requirements for your tax return and to help you to maximise your claims.

We look forward to assisting you with your tax returns.

Jun 19, 2020