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Small business entity concessions
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 a ‘small business entity’, which is an individual, partnership, trust or company with aggregated turnover of less than $2 million.
The Minerals Resource Rent Tax Repeal and Other Measures Act 2014 applies from the 1 January 2014. This Act reduces the threshold for the instant asset write-off from $6,500 to $1,000; and the accelerated depreciation deduction for motor vehicles no longer applies for vehicles purchased for more than $1,000.
In general, if you purchased an asset from 1 January 2014 you can:
For more information see our new legislation web pages on instant asset write-off and motor vehicles, or check out our small business concession case studies.
In general, if you purchased and installed an asset between 1 July 2012 and 31 December 2013 you can:
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To apply the simplified depreciation rules for the 2013-14 income year, follow these steps:
Step 1: Work out the opening pool balance for the general small business pool, taking into account:
Step 2: Work out the taxable purpose proportion of the adjustable value for:
Step 3: Work out the taxable purpose proportion of the termination value of any assets you disposed of during the year.
Step 4: Work out your deductions for:
Step 5: Work out your closing pool balance.
Step 6: If you disposed of an asset, work out any balancing adjustment required.
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