We have a small construction company and are looking into buying two brand new utes for our full time workers. I assume we qualify for the 50% tax rebate, as last year’s annual turn over was $1.8 million.
So if the total cost of the utes were say $65,000, that means we could get a tax break $32,500. Is this also the case if we were to lease the cars?
Yes, based on your business turnover being less than $2 million you are eligible for the 50% investment allowance where you buy and install your new depreciating assets before 31 December 2009. If you complete your purchase before 1 July then you will be entitled to the tax deduction in your 2009 tax return. Otherwise, the deduction will be in your 2010 tax return. The new utes qualify as eligible assets, providing they are primarily used in the business.
Where the utes are leased rather than purchased outright you should still be eligible for the investment allowance providing it is a finance lease, not an operating lease, and the finance company has transferred the investment allowance entitlement to you. You should confirm this at the time of entering into the lease agreement.
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