SIMPLIFIED DEPRECIATION RULES FOR SMALL BUSINESS

From 1 July 2012 there have been some significant changes to the depreciation rules for businesses with less than $2million aggregated turnover.

The threshold for instant asset write off has increased from $1,000 to $6,500 and can be claimed when an asset starts being used for a taxable purpose.

An immediate deduction of $5,000 is available when a new motor vehicle is purchased and the balance can be claimed through a small business pool at 15% depreciation in the first year and 30% in subsequent years.

All new assets over $6,500 can be pooled and depreciated at a 15% rate in the first year and 30% in later years. Any remaining balance from previous depreciation pools can be added to the new pool and depreciated at 30%.