50% Investment Allowance - 27.05.2009
28-05-09 - Sydney Office Equipment – News Bulletin 
 
The Investment Allowance is now approved.  
 
The Small Business and General Business Tax Break was announced on 3 February 2009 as part of the Government's Nation Building and Jobs Plan.  
The Hon Wayne Swan MP's original media release can be found at his website under media releases (Release # 013 of 3 February 2009) along with the new media release announcing the exciting increase for small businesses (Release #061 of 12th May 2009)  
www.treasurer.gov.au  
 
Previous information:  
 
The Bill was introduced to Parliament on the 19th March 2009 and is currently completing the required passage to become an Act and official legislation.  
 
Under the proposed tax break a business can claim an extra 30% tax deduction for new assets, or upgrades to existing assets for capital investment undertaken between December 13, 2008 and June 30, 2009 and install prior to 30 June 2010. For assets purchased between July 1, 2009 and December 31, 2009 a reduced incentive of 10% still applies.  
 
This 30% tax break has now been increased to 50% for small businesses with turnover less than $2m and they now have until 31st December 2009 to acquire the asset.  
 
We suggest that the best finance option currently available to your clients who wish to take advantage of the allowance is Commercial Hire Purchase (CHP). Speak with your Relationship Manager to gain further detail.  
 
We have attached Frequently Asked Questions as released by the Treasury Department on the 12th May 2009. This provides further clarification and details changes made to the legislation prior to approval.  
 
There is also a details bulletin for your clients who wish to know more on the Investment Allowance.  
 
We encourage your clients to seek independent financial advice when deciding to act on information regarding the investment allowance.  
 
Dates and Eligibility 
 
Small Business  
General Business  
 
Turnover  
< $2M  
> $2M  
 
Expenditure  
$1,000 or more  
$10,000 or more  
 
Acquire or start to hold  
13 December 2008 and  
 
31 December 2009  
13 December 2008 and  
 
30 June 2009  
1 July 2009 and  
 
31 December 2009  
 
Installed and ready for use:  
31 December 2010  
30 June 2010  
31 December 2010  
 
Deduction Benefit  
50% *  
30% *  
10% *  
 
Conditions for above  
The asset must be an “eligible asset”  
The asset must be an “eligible asset”  
 
 
*This amount is in addition to the businesses standard allowable depreciation.  
 
Eligible Assets  
 
An asset will be an “eligible asset” if it is a new tangible asset used to carry on a business for which a depreciation deduction is available under Division 40. In other words, the asset must be a depreciable asset.  
 
It does not include intangibles (such as software) or rights, nor does it include land or trading stock (which are not depreciating assets for tax purposes).  
 
In order to be able to claim a deduction for a depreciating asset under Division 40, an entity must be the “holder” of the asset. In some cases the legal owner of the asset will not be the holder. 
 
www.sydneyoffice.com.au Phone: (02) 9899-5333 Fax: (02) 9899-5585 
 
Patrick Carroll carrollp@sydneyoffice.com.au 

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