Extension of the $20,000 immediate deduction threshold
The current $20,000 instant asset write-off for small businesses with an aggregated annual turnover of less than $10M, which was set to cease on 30 June 2018, has been extended for a further 12 months.
Small businesses will be able to continue to claim an immediate deduction for purchases of eligible depreciating assets costing less than $20,000, provided that these assets are first used or installed ready for use by 30 June 2019.
Depreciable assets costing $20,000 or more can continue to be added to the general small business pool and depreciated at 15% in the first income year and 30% in each income year thereafter. The pool can be immediately deducted if its balance is less than $20,000 at any time during this period.
The current “lock out” laws for simplified depreciation that would otherwise prevent small businesses from re-entering the simplified depreciation regime for five years have also been extended to 30 June 2019.
The immediate deductibility threshold for depreciable assets and pool balances are normally $1,000. Unless further legislative changes are made the threshold will revert back to $1,000 on 1 July 2019.
No Small Business Concessions for assignment of Partnership Rights
From 7.30PM AEST on 8 May 2018 those partners seeking to alienate their income by creating, assigning or otherwise dealing in rights to future income of a partnership will no longer be able to access the small business CGT concessions in relation to the disposal of those rights.
This means that those taxpayers seeking to undertake an “Everett assignment” of their future income will be prohibited from using the small business CGT concessions to reduce a capital gains tax liability on the assignment.