The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 will extend the ‘Small Business Entity’ instant asset write-off by 12 months, from 30 June 2018, to 30 June 2019. The Bill was was introduced in the House of Reps on 24 May 2018 and on 29 May 2018, the Senate Economics Legislation Committee issue a report unanimously recommending that the Bill be passed.
‘Small Business Entities’ (with turnovers up to $10m) can depreciate assets under a ‘pooled’ basis (30% of written down value, for a full year). There is an exception for this, for assets with a cost less than $1,000, which can be entirely written off, in the first year (s.328-180 of the ITAA97). The increase in cost cap, to $20,000, for this ‘instant asset asset write’ was achieved by an amendment in the Income Tax (Transitional Provisions) Act 1997 (s328-180).
The amendments, in this Bill (to extend this write-off to 30 June 2019) are to this Transitional Provisions Act, and to ‘signpost’ notes in the ITAA97.
DATE OF EFFECT: This measure applies from 1 July 2018.
[APH website: Bills Digest, Bill, EM; FJM; LTN 98, 24/5/18; Tax Month May 2018]
Study Questions (Answers available)
- But for this Bill, would the ‘small business’ instant asset write-off end on 30 June 2018?
- Will this Bill extend this 100% write-off another 2 years?
- Is the relevant small business turnover threshold, for the 2018-19 year, $50m?
- But for this ‘instant asset write-off’, is the cost threshold, for a 100% write-off, in the first year, $1,000?
- Is the step up, in the cost threshold (for the instant asset write-off), in the ITAA97, itself?
