Repeal of the Minerals Resource Rent Tax (MRRT)

On Friday, 5 September 2014 the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014 (“the Bill”) received Royal Assent.

The Bill covers the following measures:

Abolition of the company loss carry-back from 1 July 2013

The loss carry-back has been repealed from 1 July 2013, limiting the concession to a single tax year — 2012/13. It provided tax relief to companies, by allowing them to carry-back tax losses to receive a refund against previously paid tax.

Reduction of the instant asset write-off from 1 January 2014

For the 2012–13 income year, small businesses had been able to write-off depreciating assets costing less than $6,500. They could also depreciate most other assets in the general small business pool at a rate of 15% in the first year and 30% thereafter.

From 1 January2014, the threshold will change and only assets costing less than $1,000 will be eligible for immediate write-off. Assets costing $1,000 or more will need to be depreciated in the general small business pool.

Assets costing less than $6,500, acquired and installed ready for use by the small business between 1 July 2013 and 31 December 2013, will still be eligible to be immediately written-off.

Abolition of accelerated depreciation for motor vehicles from 1 January 2014

Under previous legislation small businesses could claim up to $5,000 as an immediate deduction for motor vehicles costing $6,500 or more that were acquired from the 2012-13 income year onwards. The remaining value was depreciated in the general small business pool at a rate of 15% in the first year and then at 30% a year thereafter.

From 1 January 2014, there is no access to the $5,000 immediate deduction.

Motor vehicles acquired and available for use between 1 July 2013 and 31 December 2013 will still be eligible for an immediate initial deduction of up to $5,000.

 

Regards, Brett Price

Partner Price Williams Whyte Accounting & Business Advisors