On 2 September 2014, the legislation to repeal the Mineral Resources Rent Tax passed the senate along with a series of other concessions funded by the Mining Tax. The Bill received Royal Assent on Friday 5 September 2014.
In particular, many of the small business related measures were repealed without amendment including:
Loss Carry Back Rules
For companies with a normal accounting period, the loss carry back rules have been repealed from 1 July 2013. For those with a substituted accounting period it is repealed from the start of the period that matches the 2013/2014 income year.
The result is that companies can only apply the loss carry back rules for the 2013 income year.
Instant Asset write off and simplified depreciation
The amendment will reverse the changes made by the previous Government that enabled small business entities (SBE) to deduct assets costing less than $6,500.
From 1 January 2014, SBEs will only be able to claim an immediate deduction for depreciating assets costing less than $1,000. Any claims utilising the more generous write off amount in 2014 tax returns for assets purchased or installed ready for use from 1 January 2014 will need to be amended.
Accelerated deduction for motor vehicles
The $5,000 immediate deduction for motor vehicles acquired by SBEs has been removed from 1 January 2014.
For taxpayers that have already lodged their tax return and claimed the immediate deduction for a motor vehicle purchased after 1 January 2014, the tax return will need to be amended. No penalties will apply if the amendment is made within a “reasonable time”.