If you are a small business (turnover of less than $2m) and purchase an asset costing under $20,000 excluding GST after 12th May 2015, you can depreciate the asset fully immediately for tax purposes. It therefore reduces your taxable income for the year. This allowance is available till 30th June 2017.
Small businesses should have their assets in a general pool to get the higher depreciation of 15% in the year of purchase and thereafter 30% on the reducing balance. This would apply to assets purchased prior to 12th May 2015 or if an asset cost is more than $20,000. The interesting point is that under the new allowance, if the value of the general pool falls below $20,000 you can claim the remaining balance immediately.
Author: Eric de Ravel
Company: Teamwork Accounting
Phone number: 1300 832 648