Item 51 - Small business entity simplified depreciation

Small businesses may claim an immediate deduction for certain assets.

Under these rules, if the trust purchased assets from 7.30 pm (AEST) on 12 May 2015 and first used or installed them ready for use, then from:

7.30pm (AEST) on 12 May 2015 until 28 January 2019 The trust can immediately deduct the business portion of most depreciating assets costing less than $20,000 each (the instant asset write-off threshold)
29 January 2019 until before 7.30pm (AEDT) 2 April 2019 The trust can immediately deduct the business portion of most depreciating assets costing less than $25,000 each (the instant asset write-off threshold).
7.30pm (AEDT) on 2 April 2019 until 30 June 2020 The trust can immediately deduct the business portion of most depreciating assets costing less than $30,000 each (the instant asset write-off threshold).

The balance of the general small business pool is also immediately deductible if the balance is less than $30,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2020 (including existing general small business pool).

The 'lock out' laws have also been suspended for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until the end of 30 June 2020.

Immediate deductibility for start-up costs

Certain small business start-up expenses are immediately deductible.

Section 40-880 of the Income Tax Assessment Act 1997 (ITAA 1997) allows for certain start-up expenses, including costs associated with raising capital, to be immediately deductible where they are incurred by a small business entity or an entity that is not in business. These provisions apply from the 2017-18 income year and onwards.

Only complete this item if the trust is a small business entity using the simplified depreciation rules.

To complete this item, use the amounts calculated for small business entity depreciation deductions you claimed at item 5: Income excluding foreign income—label K—Depreciation expenses.

If you use the Depreciation worksheet, labels A and B will be completed automatically. See Depreciation worksheet (d).

Label A - Deduction for certain assets

Show at label A the amount claimed relating to these assets.

Label B - Deduction for general small business pool

Show at label B the cost of assets purchased for less than $30,000 each from 7.30 pm (AEDT) 2 April 2019 to 30 June 2019 for businesses with a turnover from $10 million and less than $50 million.

The balance of the general small business pool is also immediately deductible if the balance is less than $30,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2019 (including an existing general small business pool).

Refer to small business depreciating assets on the ATO website.