Federal Budget 2017-18 | Small Business

By admin - May 9, 2017

The instant asset write-off is being extended, but access to the small business CGT concessions will be tightened.

Instant asset write-off for Small Business Entities

As expected, the Government has announced that it will extend the immediate deductibility for eligible assets costing less than $20,000 for a further 12 months to 30 June 2018.

The immediate write off applies to small business entities with an aggregated turnover of less than $10 million. In order to obtain the tax deduction, the asset must be first used or installed ready for use by 30 June 2018. After 30 June 2018, the threshold reverts back to $1,000.

This is a welcomed measure and will help to provide an immediate cash benefit to small businesses.

Access to small business CGT concessions

The Government has announced it will tighten access to the small business CGT concessions from 1 July 2017.

As part of its tax integrity package, the Government’s proposed changes will deny access to the small business CGT concessions for assets which are unrelated to a small business. This is purportedly aimed at taxpayers with an ownership interest in larger business entities that may currently be excluded when considering the eligibility threshold for the concessions.

The small business CGT concessions will continue to be available to small businesses with aggregated turnover of less than $2 million or net assets of less than $6 million.

The Government has not provided any further details on this measure and the breadth of these changes is currently uncertain. The disposal of business assets after 1 July 2017 should be carefully considered in light of the announced changes.

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