This is a reminder that the small business investment allowance rules require that an asset must be purchased by 31 Dec 2009 to claim this additional investment allowance. The bonus deduction is claimed in the year that the asset is first used or installed ready for use. Please note that the asset must be used by 31/12/2010, otherwise no bonus deduction is allowed.
There are a couple of particular rules in relation to the investment allowance:
- is a demo car a new car? - The ATO rule of thumb is less than 3 months than new, otherwise it comes down to facts of the case and suggest you should apply for a private ruling.
- computer software is generally not eligible for the investment allowance
- when is the investment commitment time especially for leases, hire purchases and chattel mortgages (i.e. is it before 31/12/09)? - with a HP or luxury lease the investment commitment time is when the agreement or lease is entered into, i.e. usually on delivery (not when ordered) however a chattel mortgage is when the taxpayer places the order. This may be an important fact if delivery time is after 31/12/09.
