The Australian Government announced a new measure in the 2015 Budget for small businesses (aggregated turnover less than $2 million) with immediate deductibility for assets costing less than $20,000. This has since passed the Senate and become law. It applies whether you operate your business as a sole trader, partnership, company or trust.
From 12 May 2015 (budget night) to 30 June 2017, small businesses will be able to claim an immediately deduction for each depreciating asset costing less than $20,000 in the year in which the asset is first used or installed ready for use. For example, if you purchased a piece of office equipment for $18,990 (excluding GST) on 20 May 2015. You will be able to claim a tax deduction of $18,990 in the 2015 financial year.
This effectively means if you are a profitable small business and is planning on purchasing assets, you could save 30 cents in tax for every dollar you spend on an asset before 30 June 2015 or 28.5 cents if purchases are made between 1 July 2015 to 30 June 2017.
Assets costing $20,000 or more can continue to be placed in the small business pool and depreciated at 15% in the first income year and 30% thereafter. The small business pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).
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