Get more information about the 100% tax deduction on art for small business
***2017 FEDERAL BUDGET UPDATE***
The tax deduction has been extended for another year and the turnover threshold has been increased to $10 million. Get a 100% tax deduction this financial year, and next financial year.
Official Tax advice as prepared by an independent,
registered taxation consultant:
The Treasurer, when delivering the 2015 Federal Budget on 12 May 2015, made a statement about a new incentive for small business. The statement is summarised as follows.
Small business (business with an aggregated annual turnover of less than $10 million* annually) can obtain a 100% deduction for assets used and installed ready for use from 12 May 2015 to 30 June 2018* where the cost of the asset is less than $20,000.00.
Some assets may be excluded from the new concession such as horticultural plants and in-house software, mostly assets for which special depreciation rules already apply.
Does the Announcement Apply To Artworks?
Yes, artworks are depreciable assets. Provided the art works are used or displayed in business premises then presently those artworks may be depreciated. The announcement allows artworks acquired from 12 May 2015 to 30 June 2018** to be depreciated at 100%.
Who Does The Announcement Apply To?
The announcement applies to a person carrying on business with a turnover of less than $10 million*, generally the test for a small business.
For example: lawyers and doctors, accountants and financial planners, engineers and architects, plumbers and electricians, storekeepers and franchisees conducting their own business with an annual turnover of $10 million* may apply the concession of a 100% depreciation for artworks.
Can I Purchase More Than A Single Artwork?
Yes, there is no limit on the number of artworks that may be purchased and depreciated at 100%. Several works of different artists or several works of the same artist might be purchased.
Is There A Limit To The Total Amount That Is Eligible For The Incentive?
The limit of less than $20,000.00 applies to each artwork and not to the total number of artworks purchased. Several artworks might be purchased with a total cost of more than $20,000.00.
For example: if 3 artworks, each of which cost $15,000.00, were purchased for a total of $45,000.00 then each of the 3 artworks may qualify for the incentive because each cost less than $20,000.00.
Does the Announcement Apply To New And Old Artworks?
Yes, the announcement applies both to new and old artworks. The artworks must have been purchased between 12 May 2015 and 30 June 2018** to qualify for the 100% depreciation incentive.
Who Cannot Claim The New Incentive?
The announcement does not apply to individuals, trusts or companies which do not carry on business. The announcement does not apply to persons carrying on business who have a turnover of more than $10,000,000*.
The announcement does not apply to persons who hold artworks which are not used in business. For example: an artwork kept on display at home, or kept in a secure storage unit, or kept as trading stock will not qualify for the incentive.
this small business tax allowance means Buying art for your office or business has never been better value.
Artwork inspires employees and greatly enhances the work environment. It is influential in establishing corporate image and speaks volumes about a business. Art is an integral part of business presentation and operation for many of our clients. We have delivered art to countless offices and workplaces over the years and have seen, first hand, the dramatic change that well selected artworks can have on the work environment and the people that spend so much time there.
100% tax deduction up to $20,000
Take advantage of a 100% tax deduction on the purchase of artworks for your business. Just announced in the federal budget on the 12th of May 2015, and immediately available, is a 100% tax deduction allowance for small businesses with a turnover of less than 10 million* to spend up to $20,000 (per item) on purchases for your business.
- This tax deduction is for small business - broadly defined as businesses with less than 10 million* dollars turnover
- The $20,000 limit applies to each individual purchase. You may purchase as many items as you like and claim the deduction on each one.
- Wentworth Galleries stand behind the application on this tax deduction for the purchase of art but as always, buyers should seek their own taxation advice.
If you have a small business, the federal budget of 2015 is a great opportunity to improve your workspace with art. Our collection spans a vast range of Australian contemporary and Indigenous art including original paintings, limited edition prints and sculpture. The $20,000 limit is the maximum tax deduction for any single purchase but you can make as many purchases up to that amount as you like. Art for small business is a fantastic and instantaneous way to improve your space. We have works starting at just $250.
Give us a call on (02) 9223-1700, email us or come and see us today for more information or to take advantage of this opportunity for this financial year.
*Threshold raised from $2 million to $10 million
**Extended for another year from 2017 to 2018