Cladding – Tax Deductions – Repair or Improve – ATO Determination
Recently the ATO has determined the replacement of ACC (Aluminium Composite Cladding), is in fact an improvement to your property and not a repair.
We have several clients who are now reviewing their ACC on their sites and discussing with their fire engineer a solution to rectify their property and make safe moving forward.
The ATO have clearly said these costs will be a capital improvement for the purpose of Division 43 of the ITAA 1997 (refer to the link further below).
In financial modelling, this means, if the new cladding installed cost $1m, you can depreciate this cost from completion of installation over the next 40 years (2.5%) which equates to a deduction of $25,000 per year, as an example.
An additional deduction may be allowed to write off the existing cladding, if the original cost and installation was completed after 1979 on hotels (40 year life), commercial, aged care, industrial buildings and similar construction which commenced after 16 September 1987 (2.5%). As we have qualified quantity surveyors registered on the Tax Practioners Board we can provide this deduction for you.
Below is the link from the ATO which provides some more clarity and discussion. Continue reading
Effective Lives Depreciating Assets Update from ATO effective 1 July 2018 – May Affect you!!
This is an update for those who may be acquiring plant (depreciating assets) in the next year, to be aware of the new effective lives set down by the ATO (276 pages) in particular to the following industries and Industry activities:
- Butter Manufacturing
- Fruit and vegetable processing
- Gas, oil and mining support services (excluding offshore services)
- Ice cream manufacturing
- Scientific testing and analysis services
- Spirit Manufacturing
Refer to this link for the details.
Please contact any of the people below for further assistance :
BRISBANE
Paul Mazoletti
National Director
o. 07 3221 8255
m. 0408 749 202
e. pmazoletti@napierblakeley.com Continue reading