Small business immediate asset deduction: ATO guidance

The ATO has issued guidance on the 2015-16 Federal Budget measure that allows small businesses to immediately deduct each asset costing less than $20,000. The ATO said:

•  as a once-off, small business entities that have previously elected out would not be subject to the “lock-out” rule of the concessions but will instead be able to elect to use them immediately if they choose to do so

• the rules around asset eligibility would not change

• most assets are eligible, except for a small number of exclusions which receive different depreciation treatment. These include:

• horticultural plants, which are subject to their own “uniform capital allowance” rules (UCA)

• capital works, which are subject to their own “capital works” depreciation rules

• assets allocated to a low-value or software depreciation pool, which are subject to the depreciation rules under those pools

• primary production assets, where taxpayers can chose to use the specific UCA rules or accelerated depreciation, and

• assets leased out to another party on a depreciating asset lease.