With everyone returning to work after a relaxing break, attention now turns to the remainder of the 2023 financial year with businesses beginning to focus on ensuring they minimise their tax and take advantage of any concessional rules available.
One such set of rules which has been popular is the depreciation incentives which have been in place in some form since the 2020 financial year which allow for the full write off of most assets purchased. These rules are set to end on 30 June 2023 and don’t appear to be extended at this stage.
Any assets can be written off in full up to any limit but the key is not only does the asset need to be purchased by 30 June 2023, it must also be installed or first used by this date as well. So for businesses planning to purchase major machinery or equipment, time is quickly running out to benefit from these concessional rules as there can be significant delays in receiving such assets.
Unfortunately, many businesses may be caught out and purchase an asset prior to 30 June 2023 but not receive it until post 30 June 2023 and in this case the business will need to depreciate under the older, less favourable rules. The asset will still be able to be depreciated, but instead of receiving this benefit upfront, businesses will need to receive the benefit over the useful life of the asset.
If you have any questions, please do not hesitate to contact us.