31 Jul Backing Business Investment

Measures introduced by The Australian Government in March 2020 provides additional incentive to businesses with a turnover of less than $500 million for the 2019-20 and 2020-21 income years,to deduct the cost of depreciating assets at an accelerated rate.

For each new asset,the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for income producing purposes. You claim the deduction when lodging your tax return for the income year.

Eligble Assets

To be eligible to apply the accelerated rate of deduction, the asset must :

• must be new and not previously held by another entity ( other than trading stock )
• be first held on or after 12 March 2020
• first used or first installed ready for use for income producing purpose on or after 12 March 2020 until 30 June 2021.
• not be an asset to which an entity has applied asset write-off rules or depreciation deductions.

There is no limit on the number of eligible assets that you can apply accelerated depreciation to in an income year

Eligble assets do not include

• second-hand assets
• certain primary production assets
• buildings and other capital works for which you can deduct amounts under Division 43
• other specific capital asset and expense deductions
• assets you were committed to acquiring before 12 March 2020.

There is no limit on the cost of an eligible asset to which you can apply accelerated depreciation to, unless it is a passenger vehicle ( except a motorcycle or similar vehicle) designed to carry a load of less than one tonne and fewer than nine passengers.

We suggest you seek clarification from your accountant on your or the asset you propose to purchase eligibility, prior to committing to purchase an asset.