top of page

Depreciation allowances

Updated: Feb 22, 2023

As the end of the financial year is only just over 4 months away it is time to turn your mind to options available to reduce your tax. One strategy that can be used is the purchase of assets by your business that have the benefits of an immediate tax deduction.


In this article, we will discuss the rules and regulations surrounding depreciation of assets including turnover thresholds, rules on asset value, and other considerations that businesses should keep in mind.


Rules on Turnover

  • Small Business Entities – turnover under $10 mill – full expensing with no asset value threshold, new and second hand assets

  • Medium Business Entities - turnover $10 mill to $50 mill - full expensing with no asset value threshold, new and second hand assets

  • Large Business Entities - turnover under $5 billion - full expensing with no asset value threshold, new assets only

In summary this means that businesses can claim an immediate deduction for the full cost of the asset, rather than depreciating it over time.


Asset condition

Assets do not need to be new to be eligible for depreciation except for large business entities.


Installed ready for use

For businesses to claim a deduction in the current financial year, they must ensure that the asset is installed and ready for use by 30 June 2023. If the asset is not installed and ready for use by this date, the deduction for applicable depreciation will need to be claimed in the following financial year.


By keeping in mind the rules and regulations surrounding depreciation of assets businesses can ensure that they are making the most of this tax strategy. With immediate deduction available until 30 June 2023, now is the perfect time for businesses to consider purchasing assets and claiming the deduction before the end of the financial year.


If you have any questions please contact your client manager.





81 views0 comments

Recent Posts

See All

Comentários


bottom of page