50 Percent Investment Allowance
15 October 09The Government in the Budget extended their previously announced business investment allowance to 50% (up from 30%) and extended the period in which the contract to acquire the new asset needs to be executed - now from the 13th December 2008 until 31st December 2009.
The allowance is available for all businesses with the following conditions:
- It applies to eligible new depreciating assets acquired under a contract, or started to be constructed, after 12.01am AEDT 13th December 2008 and before the end of December 2009 and installed ready for use by the end of December 2010.
- The assets must be new assets not used.
- The assets must be eligible for depreciation under Division 40 ITAA 1997 and must be tangible assets.
- Small businesses will be able to claim the deduction for eligible assets costing $1,000 GST exclusive or more. Small businesses must have a turnover of less than $2 million a year to qualify.
For other businesses that are not small businesses, a minimum expenditure threshold of $10,000 GST exclusive applies, the rate of the allowance is only 30% if the contract is executed before 30th June 2009 or 10% if executed by 31st December 2009.
In all cases businesses should seek advice from their accountants and tax agent. This is another opportunity for you or your clients, seeking to expand their business as the new allowance also applies to finance assets. Click here for more information.
We had a number of clients miss out on the allowance for their 2008/2009 returns as they left it too late, with some lenders not being able to settle deals 2 weeks prior to end of month. We anticipate a similar if not busier time in December due also in part to the traditional Christmas closures in conjunction with the end of the Business Investment Allowance.
Beat the rush and call me now on 0427 444 633
Jason Fong
Australian Loan Professionals
