The tax deduction has been extended for another year and the turnover threshold has been increased to $10 million. Get a 100% tax deduction this financial year, and next financial year.
How you may ask? Well…
OFFICIAL TAX ADVICE AS PREPARED BY AN INDEPENDENT, REGISTERED TAXATION CONSULTANT:
The Treasurer, when delivering the 2015 Federal Budget on 12 May 2015, made a statement about a new incentive for small business. The statement is summarised as follows:
Small business (business with an aggregated annual turnover of less than $10 million* annually) can obtain a 100% deduction for assets used and installed ready for use from 12 May 2015 to 30 June 2018* where the cost of the asset is less than $20,000.00.
Some assets may be excluded from the new concession such as horticultural plants and in-house software, mostly assets for which special depreciation rules already apply.
DOES THE ANNOUNCEMENT APPLY TO ARTWORKS?
Yes, artworks are depreciable assets. Provided the art works are used or displayed in business premises then presently those artworks may be depreciated. The announcement allows artworks acquired from 12 May 2015 to 30 June 2018** to be depreciated at 100%.
WHO DOES THE ANNOUNCEMENT APPLY TO?
The announcement applies to a person carrying on business with a turnover of less than $10 million*, generally the test for a small business.
For example: lawyers and doctors, accountants and financial planners, engineers and architects, plumbers and electricians, storekeepers and franchisees conducting their own business with an annual turnover of $10 million* may apply the concession of a 100% depreciation for artworks.
CAN I PURCHASE MORE THAN A SINGLE ARTWORK?
Yes, there is no limit on the number of artworks that may be purchased and depreciated at 100%. Several works of different artists or several works of the same artist might be purchased.
IS THERE A LIMIT TO THE TOTAL AMOUNT THAT IS ELIGIBLE FOR THE INCENTIVE?
The limit of less than $20,000.00 applies to each artwork and not to the total number of artworks purchased. Several artworks might be purchased with a total cost of more than $20,000.00.
For example: if 3 artworks, each of which cost $15,000.00, were purchased for a total of $45,000.00 then each of the 3 artworks may qualify for the incentive because each cost less than $20,000.00.
DOES THE ANNOUNCEMENT APPLY TO NEW AND OLD ARTWORKS?
Yes, the announcement applies both to new and old artworks. The artworks must have been purchased between 12 May 2015 and 30 June 2018** to qualify for the 100% depreciation incentive.
WHO CANNOT CLAIM THE NEW INCENTIVE?
The announcement does not apply to individuals, trusts or companies which do not carry on business. The announcement does not apply to persons carrying on business who have a turnover of more than $10,000,000*.
The announcement does not apply to persons who hold artworks which are not used in business. For example: an artwork kept on display at home, or kept in a secure storage unit, or kept as trading stock will not qualify for the incentive.
THIS SMALL BUSINESS TAX ALLOWANCE MEANS BUYING ART FOR YOUR OFFICE OR BUSINESS HAS NEVER BEEN BETTER VALUE.
Artwork inspires employees and greatly enhances the work environment. It is influential in establishing corporate image and speaks volumes about a business. Art is an integral part of business presentation and operation for many of our clients. We have delivered art to countless offices and workplaces over the years and have seen, first hand, the dramatic change that well selected artworks can have on the work environment and the people that spend so much time there.
If you have any more questions or you would like to know more, contact Morpeth Gallery on (02) 4933 1407 or email email@example.com