tax planning before 30th June 2014

For tax payers who might be planning to reduce taxable income for 2013/14, make sure actions are taken before 30/06/2014.

A big tax advantage when making use of accelerated depreciation for motor vehicle and depreciating assets.

Small businesses can use the simplified depreciation rules as an alternative to the uniform capital allowances (UCA) rules to work out deductions for most depreciating assets.

Business means the individual, partnership, company or trust that carries on the business activity.

Small business means ‘small business entity’, which is an individual, partnership, trust or company with aggregated turnover of less than $2 million.

In general, you can:

    • immediately write off most depreciating assets costing less than $6,500 each
    • pool most other depreciating assets (irrespective of their effective life) in the general small business pool and depreciate at the rate of 30%
    • depreciate most newly acquired assets at 15% in the first year, regardless of when they were acquired during that year
    • claim an accelerated initial deduction for motor vehicles, i.e $5,000 plus 15% for the first year.