Introduced in the 2020-21 Budget and now extended until 30 June 2023, this measure enables an asset’s cost to be fully deductible upfront rather than being claimed over the asset’s life, regardless of the cost of the asset.
Legislation passed by Parliament last month extends the rules to cover assets that are first used or installed ready for use by 30 June 2023.
Key takeaways:
Temporary full expensing enables your business to fully expense the cost of:
new depreciable assets
improvements to existing eligible assets, and
second hand assets
It is important for businesses to the note that the loss carry back rules have not as yet been extended to 30 June 2023
Loss carry back rules allow some companies to apply current year losses against taxable profits in prior years and claim a refund of the tax that has been paid
At this stage the loss carry back rules are due to expire at the end of the 2022 income year
There is hope that the loss carry back rules will be extended to cover the 2023 income year as well.
Some expenses excluded from immediate deductions:
improvements to land or buildings that are not treated as plant or as separate depreciating assets in their own right
Please do not hesitate to email our office to discuss how this legislation may apply to your business.
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