Temporary Accelerated Depreciation for Small Business Assets costing less than $20,000
The Government will significantly expand accelerated depreciation for small businesses by allowing small businesses with aggregate annual turnover of less than $2 million to immediately deduct assets they start to use or install ready for use, provided the asset costs less than $20,000 (currently, an immediate write-off is generally available for assets costing less than $1,000).
This measure will apply for assets acquired and installed ready for use between 7.30pm (AEST) 12 May 2015 and 30 June 2017.
The Government also announced that it will suspend the current 'lock out' laws for the simplified depreciation rules until 30 June 2017. The ‘lock out’ rules prevent small businesses from reentering the simplified depreciation regime for five years if they opt out.
Assets valued at $20,000 or more (which cannot be immediately deducted) will 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).
From 1 July 2017, the thresholds for the immediate depreciation of assets and the value of the pool will revert back to existing arrangements.
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