On 12 December 2008 the Rudd Government announced details of a
'10% temporary investment allowance' aimed towards boosting
the economy. From 12:01am 13 December 2008 until 30 June 2009
businesses will be able to claim an additional 10% tax deduction
based on the first element cost base (according to subdivision 40-C
of the ITAA 1997) of all new tangible depreciating assets over the
value of $10,000.
New assets must be ordered or acquired before 30 June 2009 and
must be installed ready for use by 30 June 2010. The term 'new
asset' includes both purchased assets and assets constructed by
the taxpayer (construction must commence before 30 June 2009). Also
note that where an asset is used for private use, only the portion
of the asset used for carrying on a business can be counted towards
the $10,000 minimum expenditure requirement. For example, a $15,000
asset used 50% for private purposes will not be eligible for an
additional deduction ($15,000*50%=$7,500 <$10,000).
