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Changes To Simpler Depreciation Rules

The small business instant asset write-off threshold has been increased from $1,000 to $6,500 for the 2012-13 income year. This means the long life small business pool and the general small business pool have been consolidated into a single pool to be written off at one rate.

These amendments only apply to small businesses that have an aggregated turnover of less than $2 million. An accelerated deduction can also be claimed for motor vehicles costing $6,500 or more under the same provisions. The cost of the motor vehicle is added to the general pool but unlike other assets, the deduction is $5,000 plus 15% of the remaining amount.

For example if you purchase a vehicle only used for business purposes for $12,000 in the 2012-13 income year you can claim the following:

  • $5000 + 15% (12,000 – 5,000) = $6,050

If the motor vehicle costs less than $6,500 it can be immediately written off. For more information on these depreciation rule changes talk to your Chartered Accountant.

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