50% Investment Allowance - Last Days - Aussie Stock Forums

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  1. #1
    Macquack's Avatar
    Join Date
    Apr 2008
    Shark watching Down Under

    Default 50% Investment Allowance - Last Days

    The 50% Investment Allowance for small business (turnover under $2 million) ends on the 31st December, 2009.http://www.ato.gov.au/taxprofessiona...t/00175431.htm

    I have a question for the tax gurus. If I purchase a new company car by the deadline (say $50,000) for my small business - am I entitled to a tax deduction of 50% x $50,000 = $25,000 plus 40% x $50,000 x 0.5 = $10,000 being the depreciation for the remainder of the tax year = a total of $35,000?

    BTW, the new "simplified depreciation rules" appear to be more complicated.
    "Probably again in the future the American taxpayer will be held hostage by a bank that is too big to fail." - outgoing US President Barack Obama

  2. #2

    Join Date
    Jun 2007
    Melbourne vic

    Default Re: 50% Investment Allowance - Last Days

    you claim the investment allowance of $25,000
    then you claim the Capital Allowance....Depreciation for an ordinary car, its effective life is 8 years...= 12.5% rate diminishing value method
    so 50,000 x ......12.5 = 6250 @ 200% = 12500 x 182/365 apportioned by days
    = claim 6250 for this year
    less any private use
    so the claim for 2010
    is 25000
    + 6250 less private use

    in the 'old days' car depreciation was 22.5% DV
    so 50,000 x 22.5% = 11250
    so effective life was roughly 5 years

    the ATO site is like a dogs breakfast now....no simple answer, waste hours searching...it used to be a good site, with qucik and easy answers
    talk to a tax accountant
    Property Investor in both Commercial and Residential property. I hold for 10 years or the mv reaches my sell figure, whichever comes first.

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