Small business write-off changes

The capital allowances provisions will be changed to allow small businesses:

•  to write-off immediately assets valued at under $5,000 (compared with the current $1,000 limit), and
•  to write-off other assets (ie assets valued at over $5,000) in one depreciating pool at the rate of 30%. Currently, depreciating assets may be allocated to two different depreciating pools. This will not apply to buildings.

The AFTS Report recommended that the write-off limit should be $10,000 (Rec 29).

The revised rules will apply from 1 July 2012.

The government will consult on the details of the new rules during the 2010/11 year.

Ref: Stronger, Fairer, Simpler — Fact Sheets, p 5.