Claiming deductions for plant and equipment

Due to the potential changes affecting capital allowances, it is important that businesses understand what they are entitled to this year end.

The capital allowances for small business entities this year end is:

  • small business entities would be able to claim a deduction for the value of a depreciating asset that costs less than $1000 (rather than the $6500 before 1 January) in the income year in which the asset is first used or installed ready for use
  • small business entities would be able to claim a deduction for an amount included in the second element of the cost of a depreciating asset that was first used or ready to use in the previous income year
  • small business entities would be able to allocate depreciating assets that cost $1000 (rather than the $6500 before 1 January) or more to their general small business pool and claim a deduction for the depreciation of the assets in the pool
  • assets allocated to the general small business pool would depreciate at a rate of 15 per cent in the year they are allocated and a rate of 30 per cent in subsequent years
  • if the value of a small business entity’s general small business pool is less than $1000 (rather than $6500 before 1 January) at the end of the income year, the small business entity would be able to claim a deduction for the entire value of the pool