Instant asset write-off tips – Part 2
As I said in part 1, in all my years as a business and tax advisor to small and medium businesses, there has never been a tax incentive that attracts as much interest as the instant asset write-off.
It’s a great opportunity to manage your tax and cash flows.
the carry back of company losses.
But before doing so, please ensure you have factored in the following considerations (see part 1 last for the first 7 tips):-
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Your small business must own the asset. Your business either needs to pay for it or finance it by a loan, hire purchase or by way of a chattel mortgage contract.
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Assets that your business leases from others do not qualify for the write-off (as one does not own the asset until the final payment is made or the lease contract is paid out early).
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The incentive also doesn’t apply to assets that are leased by your business to others.
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It’s not about when you buy the asset. Your entitlement to claim is based on when you held the asset first ready for use. So for assets you need to have installed, it is not when you buy it; it is when you can first use it.
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Make sure you when buy an asset to have the installation date agreed upon.
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Installation and delivery costs comprise part of the cost of the asset.
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If you trade-in an asset, it is the cost of the new asset that qualifies. So if your business buys a car for $50,000 and trades in an old car for $8,000, then the deductible write-off is $50,000.
Please come back to this web page for the last of the 20 tips and traps.
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