Investment Allowance Boost.09.CS,indd.indd by lindayy


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									    New ‘Increased’ Investment Tax deduction to
            Boost Business Investment
Division 40 changes
In a bid to further encourage capital investment by businesses and to provide stimulus to the Australian economy, the
Federal Government announced on 3 February 2009 an additional bonus tax deduction by expanding the recently
announced investment allowance to an initial 30% deduction, later reducing to 10%.

The one off allowance only applies to businesses for new expenditure on existing assets as well as for new assets.
The tax bonus of 30% applies if you acquire a new asset between 13 December 2008 and 30 June 2009 with the asset
being installed ready for use by 30 June 2010.

The tax bonus of 10% applies if you acquire a new asset between 1 July 2009 and 31 December 2009 with the asset
being installed ready for use by 31 December 2010.

The taxpayer will be able to claim an additional tax deduction of either 30% or 10% on a depreciating asset (that
complies with Division 40 of ITAA97). Capital works which would normally be deducted under Division 43 of ITAA97
will not qualify for the bonus tax deduction.

    Small businesses - To be eligible for the tax bonus           Non small businesses - To be eligible for the tax
   the asset must cost $1,000 or more and the small              bonus an asset must cost $10,000 or more. If they
   business must have a turnover of less than $2 million         were to upgrade and renew an air conditioning
   a year. If they were to buy and install a $3,000              chiller costing $120,000 before the end of June
   photocopier before the end of June 2009 they could            2009 they could claim the following deductions
   claim the following deductions over the next 2 years:         over the next 2 years:

                Bonus          Normal depreciation                         Bonus             Normal depreciation
                  Tax              (Diminishing Value                       Tax                (Diminishing Value
               Deduction       method based on 365 days)                 Deduction          method based on 365 days)
Yr.1             $900                  $1,200                   Yr.1      $36,000                    $12,000
Yr.2             $ 0                   $ 720                    Yr.2           $0                    $10,800
Total           $900                   $1,920                   Total     $36,000                    $22,800

                “Based on the above examples a company with a tax rate of 30% would benefit
                       with a net after tax increase of $846 and $17,640 respectively.”
                 Alastair Walker, National Director, Napier & Blakeley
                                                 With 25 years of experience Napier & Blakeley are able to assist
                                                 you in correctly claiming and maximising all the deductions that
                                                 may be available for your property investment or portfolio.

                                                 To find out how Napier & Blakeley can minimise your Cost,
                                                 manage your Risk and maximise your Returns, contact one of
                                                 our senior consultants today.
                                                      John Mathew              VIC        03 9915 6300
                                                      Paul Mazoletti           QLD         07 3221 8255
                                                      David Liddelow           NSW        02 9299 1899
                                                      Alastair Walker          QLD         07 5570 6432

         Roger Penman, Principal at WHK Horwath commented that:
               “any taxpayer would need to fully understand the application of these allowances
                            if they are going to commit to any future expenditure.”

               For more information on Napier & Blakeley services
                      please visit
     Technical Due Diligence    Sustainability   Make Good Schedules     Financiers’ Project Monitoring
                Quantity Surveying    Tax Depreciation     Reinstatement Cost Assessments

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