Depreciation post 2017 Federal Budget

Discussion in 'Accounting & Tax' started by Scott No Mates, 18th Jul, 2017.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,252
    Location:
    Sydney or NSW or Australia
    Article from Washington Brown Quantity Surveyors outlining how the new depreciation rules are going to work.

    Linky

    The oddest one is the comment about reducing CGT payable upon selling as you haven't claimed depreciation (but ignoring the time value of claiming early in the peace, especially as investors not as short term speculators).

    Another oddity is suggesting a corporate holding structure to continue to claim depreciation ignoring financing and other risks.
     
    Scott No Mates, 18th Jul, 2017
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,005
    Location:
    Australia wide
    Although a company could claim depreciation on fixtures and fittings still when the copany pays dividends this doesn't flow out into any benefits as it affects the amount of franking credits available.
     
    Terry_w, 18th Jul, 2017
    #2
    SimonQld likes this.
  3. SimonQld

    SimonQld Well-Known Member

    Joined:
    20th May, 2017
    Posts:
    49
    Location:
    Gold Coast
    Lol. Nice backflip there by Tyron.
    On 12 May 2017 Tyron wrote:
    "I suspect that the legislation will be worded such that if the plant and equipment was in situ at the time of purchase, you can no longer claim it....I suspect the developer will be deemed to have bought the plant and equipment – not you." (The Depreciation Party Is Over - Washington Brown)
    And now:
    "Acquirers of brand new property will carry on claiming depreciation exactly the way they have done so to date. This is great news for the property industry and the way it should be...We suspected this would be the case and I believe the property industry can collectively breathe a sigh of relief."
    If Tyron suspected this would be the case, then why did he spook many in the property industry with the idea that the developer is the first owner?
     
    SimonQld, 18th Jul, 2017
    #3
    Scott No Mates likes this.
  4. MWI

    MWI Well-Known Member

    Joined:
    17th Jul, 2017
    Posts:
    2,294
    Location:
    Lower North Sydney NSW
    So do I understand it correctly, if bought under SMSF, for any renovations, can claim fixtures and fittings as before?
     
    MWI, 18th Jul, 2017
    #4
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,554
    Location:
    Sydney
    SMSFs are affected by the same rules as any other investors. NO special carve out. Ditto small companies, unit trusts and disc trusts.

    Only large entities and commercial property gets excepttions
     
    Paul@PAS, 19th Jul, 2017
    #5
  6. Washington Brown

    Washington Brown Active Member Business Member

    Joined:
    1st Feb, 2017
    Posts:
    35
    Location:
    Sydney
    Hi Simon,

    Thanks for taking an interest.

    In my white paper Budget Changes to Depreciation - Washington Brown I wrote that I suspected new property would be ok.

    Not my fault the Budget Statement was so poorly worded!

    All the best.

    Regards

    Tyron
     
    Washington Brown, 26th Jul, 2017
    #6