When can I claim a deduction?
In order to claim a deduction for the relevant income year, the asset purchased must be used by the business, or is installed ready for use during that year.The placement of an order at year end for an asset in which possession will be taken in the following income year will not qualify for an immediate deduction until that following year.
How do the rules work with vehicle trade-ins?
If a new car costs $25,000 and the car yard offers to trade in your old car for $6,000, will that result in a vehicle that comes in under the $20,000 threshold for immediate write-off?
This is most likely not going to be the case. Based on the current law and how that operates, we don’t believe it would be possible to claim that $19,000 as an immediate write-off. “The way the law is constructed at the moment tells us that the value of that vehicle is still $25,000, made up of $19,000 cash plus $6,000 as a non-cash value, in this case being the trade-in. “So while it has become evident that there are some misconceptions out there that you can claim an after-trade-in amount for a vehicle, we believe that the treatment under the current tax law will prevail.”
