Small Businesses Benefit from 2012 Depreciation Rule Changes

From 1 July 2012 small business depreciation rules will have significant changes. The amendments will apply to small business entities as defined in Section 328-110 of the Income Tax Assessment Act 1997 (Cwlth) that have an aggregated turnover of less than $2m for an income year.

Small businesses will be able to write off significantly more in initial depreciation than is currently possible.

• Instant Write-Off Limit Increases
  The small business instant asset write-off limit will increase from $1,000 to $6,500. Allowable items may include copiers, laptops, fridges and desks.
• Other Depreciation Assets Go Into A Single Pool
  Small business can combine the assets of their long-life small business pool and the assets in their general small business pool into a single pool and write off the depreciation of all the assets at the rate of 30 per cent.
• Motor Vehicle Write Off Increased
  For 2012/2013 income tax year, small business will be able to claim an accelerated initial deduction up to $5,000 for vehicles acquired costing $6,500 or more.