A NUMBER of financial groups have cast light on the Federal Government’s Investment Allowance package, which subsidises the capital cost of eligible new equipment.
The allowance gives businesses a one-off tax deduction equal to 30% of the capital cost of eligible new equipment and motor vehicles costing $10,000 or more. This is in addition to the standard depreciation claimed for such assets.
According to Finlease, these measures, combined with falling interest rates and low equipment costs, will have a significant impact on many companies. Individual companies should do their own research to determine what benefits they will gain.
The allowance is only valid until 30 June 2009, and equipment must be purchased before the deadline and installed and ready for use by 30 June 2010. For companies which have an annual turnover of $2m or less, the allowance is also available for assets costing $1000 or more.
Meanwhile, the Australian Structured Finance Group is anticipating this allowance may be extended beyond the 30 June deadline cut-off, because investment activity will not significantly improve in the short term due to ongoing recessionary pressures.
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