Below is an UPDATED PLAIN SPEAK table & summary of the Temporary Full Expensing of Depreciating Assets tax incentives announced in the Federal Government’s 2020 Budget on 6th October 2020 and extended in the May 11th 2021 Budget
Temporary Full Expensing of Depreciating Assets (TFEDA)
If you would like to know more, the Government Fact sheet link here has excellent explanation with examples (see pages 9-12) https://budget.gov.au/2020-21/content/factsheets/download/tax_fact-sheet.pdf
Below is a PLAIN SPEAK table & summary of the new Loss Carry Back opportunities as announced in the Federal Government’s 2020 Budget on 6th October 2020.
Temporary Loss “Carry Back” opportunities
Franking Account Deficit?
To simplify and provide clarity on the Temporary Full Expensing of Depreciating Assets & Loss Carry Back tax incentives announced in the Federal Government’s 2020 Budget on 6th October 2020 and extended by an extra year in the May 11 2021 budget, the following brief case studies may assist.
Below are 3 PLAIN SPEAK “HYPOTHETICAL” EXAMPLES of the potential outcomes for a range of company profiles in 3 distinct annual turnover bands.
Simplified Depreciation Pool (for business with Turnover up to 10 million) & Loss Carry Back
*Care – if Barry had claimed any franking credits from 2019 &/or 2020 where he received a credit for the 27.5% company tax already paid by AAA, this would need to be adjusted against the above refund.
Temporary full expensing of depreciating assets (for business with Turnover up to $50 million) & Loss Carry Back
*Care – if Dave had claimed any franking credits from 2019 &/or 2020 where he received a credit for the 27.5% company tax already paid by DDD, this would need to be adjusted against the above refund.
Temporary full expensing of depreciating assets (for business with Turnover up to $5 billion) & Loss Carry Back
*Care – if Andrew had claimed any franking credits from 2019 &/or 2020 where he received a credit for the 27.5% company tax already paid by XYZ, this would need to be adjusted against the above refund.
Disclaimer
The above information is provided at a conceptual level and is not provided as formal tax advice. We advise all business owners to seek independent tax advice with respect to these matters.
Mark O’Donoghue, CEO Finlease
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