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  • Assets put to a tax-preferred use

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Division 250 of the ITAA 1997 applies to arrangements involving the leasing of assets to tax-preferred end users (such as tax-exempt entities and non-residents).

    If Division 250 applies to an arrangement, capital allowance deductions will be denied in relation to the asset and the arrangement will be treated as a deemed loan that is taxed as a financial arrangement on a compounding accruals basis. Division 250 applies to all relevant arrangements where the tax-preferred use of an asset starts on or after 1 July 2007. However, Division 250 does not apply if the use occurs under a legally enforceable arrangement that was entered into before 1 July 2007.

    Division 250 also does not apply if you are a small business entity for the income year in which the arrangement period for the tax-preferred use of the asset starts, and you choose to deduct amounts under Subdivision 328-D (capital allowances for small business entities) for the asset for that income year. Division 250 also does not apply to certain relatively short-term and lower value arrangements. Go to our website www.ato.gov.au for more information.

    Attention

    Note

    When you have completed your Business and professional items 2008-09, you will need to transfer:

    • your Net Personal services income (PSI) amount (if any) from A item P1 on your schedule to A item 14 on page 9 of your tax return (supplementary section)
    • your Net income or loss from business amounts from Y and Z item P8 on your schedule to B and C (respectively) item 15 on page 10 of your tax return (supplementary section).
    End of attention

    Concessions for small business entities

    Did you carry on a business at any time during the year and have an aggregated turnover of less than $2 million or are you a former simplified tax system (STS) taxpayer?

    No

    Go to P1 Personal services income (PSI).

    Yes

    Read on if you want to find out more about the small business entity concessions. (You do not have to complete any questions at this item.).

    You need to know

    Small businesses with an aggregated turnover of less than $2 million are called 'small business entities' and may qualify for a range of tax concessions.

    Eligible businesses can choose to use the concessions that best suit their needs. It is not necessary to elect to be a small business entity each year in order to access the concessions. Nonetheless, eligibility must be reviewed each year.

    The simplified tax system no longer operates. However, all of its concessions remain available to eligible businesses.

    A small business entity may be eligible for the following concessions:

    Last modified: 27 Apr 2010QC 21791