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Accelerated Depreciation on purchases up to $20,000 – Legislation passed

Accelerated Depreciation on purchases up to $20,000 – Legislation passed

The Tax Laws Amendment (Small Business Measures No 2) Bill 2015 passed the Senate on 15 June 2015.

The measure applies between 7.30 pm (AEST) on 12 May 2015 and 30 June 2017.

All small businesses (with an aggregated turnover below $2 million) will now be able to obtain an immediate tax deduction for a wide range of assets purchased and used or installed and ready for use by 30 June 2017 that cost less than $20,000.

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed in the small business simplified depreciation pool (the pool) and depreciated at 15% in the first income year and 30% each income year thereafter.  The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).

The ‘lock out’ laws for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for 5 years if they opt out) will be suspended until 30 June 2017 allowing all small businesses to take advantage of the temporary increase in the deduction threshold.

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