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Topics on tax issues for lessors and lessees (9)

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TAX TIP – Temporary increase to ‘low cost’ and ‘low value’ thresholds

An immediate deduction is available under S.328-180, for an SBE’s depreciating asset whose cost is less than the low cost threshold. In respect of the 2019 and 2020 income years, this threshold has been temporarily increased from $1,000 to:

  • $20,000 – If the asset was first acquired on or after 12 May 2015, and it was first used (or installed ready for use) for a taxable purpose before 29 January 2019;
  • $25,000 – If the asset was first acquired on or after 12 May 2015, and it was first used (or installed ready for use) for a taxable purpose on or after 29 January 2019 but before 2 April 2019;
  • $30,000 – If the asset was first acquired on or after 12 May 2015, and it was first used (or installed ready for use) for a taxable purpose on or after 2 April 2019 but before 1 July

The threshold for a low pool value balance to be deductible in full (which reduces the pool balance to nil) has also been temporarily increased for an SBE taxpayer with a 30 June year- end to $30,000 for the 2019 and 2020 income years (from $1,000 under S.328-210).

Note that these thresholds revert to $1,000 from 1 July 2020. Refer to S.328-180 of the

Income Tax (Transitional Provisions) Act 1997.

  

  • Should you have any queries, please contact Tax Ideas Accountants & Advisers on +61 2 83181545
  • Alternatively, you can book an appointment in our live calendar.

 

Written by Panbo Ye

I help people discover POWERFUL unknowns in Tax Ideas | Wealth Strategies | Retirement Planning | Finance Solutions!

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