Cheap new Planes!: 30% Off!

[bushpilot]

Or so the cry reads on the Foxbat Australia website -

 

"30% off the price!

 

The government is currently offering a 30% tax allowance to small businesses and primary producers, when they purchase equipment. Aircraft qualify for the tax rebate - so a $100,000 Foxbat really costs only $70,000. But be quick - orders must be placed before 30 June 2009".

 

I'm not an accountant, but I dont think a 30% tax allowance reduces the effective buy price by 30%. Nonetheless, maybe this Rudd 'giveaway' may encourage a few schools and others (farmers etc.) to look at buying some new wings...

 

Any bean-counters out there that can tell us how the tax calculation actually works?

 

BTW: Meant to be flying today - but 50km/hr winds and rain scuds are keeping me on the computer...

 

 

[Ultralights]

this is very good news, im hopeing to buy a new jabiru in the next month or 2

 

 

[Guest Maj Millard]

How far back is it retroactive ?, I have got the Lightwing on the company books as I use it to get around to jobs, and my accountant even likes the idea. I bought it about six month ago but I am still paying it off. He said my hangar rent can even be considered a company expense..............................................

 

 

[GraemeK]

The tax break is an investment allowance providing an additional tax deduction of 30 per cent of the cost of eligible new assets acquired between 13 December 2008 and the end of June 2009*. There is also a lower (10%) deduction for assets acquired between July and December 2009.

 

Small businesses with a turnover of less than $2million can claim the deduction for eligible assets costing $1,000 or more.

 

The 30% can be claimed as a deduction in the 2009 financial year (it is not a rebate). Thus, if your plane cost $100,000 you can claim a deduction of $30,000 this year. Thus, as bushpilot suggests, it doesn't really save you 30% - the saving will depend on your marginal rate - at a 30% marginal rate, you'd save $9,000. Suggesting it's 30% off the price is a little bit naughty!

 

The Treasury has put out FAQ's for this allowance here.

 

* terms and conditions apply!!

 

 

[Guest brentc]

Most aircraft companies are telling people about this. I was told at Narromine that Tecnam sold 2 aircraft when people heard about this, same goes for Jabiru.

 

 

[Guest basscheffers]

Bugger, not for second hand purchases, only new. Oh well, somehow I think I'll have enough accumulating losses this year and in the next few to last me a while anyway; I probably would not have seen the benefit for at least a decade! :)

 

 

[Guest Orion]

Just so everyone's clear about this.

 

1 The legislation is not through Parliament yet so it is entirely possible that it could be either rejected or changed.

 

2 The deduction is available once the aircraft is ready to use not when ordered. The issue of date ordered is relevant only for determining the amount of the investment allowance either 30% or 10%. The deduction can only be actually claimed at the same time as you begin to be eligible to claim depreciation on the asset. I'm not going to go into the nitty gritty but depreciation claims start when the asset is held ready for use not when ordered.

 

3 So don't order pre 30/6/2009 with the expectation that the claim will be available in the June 2009 year. All a pre 30/6/2009 order will deliver is the entitlement to the 30% claim in the year that the plane is actually ready to use. In this case it will be a claim in the 2011 year at the latest as the asset must be ready for use by december 2010. To get a deduction in the 2009 tax return the plane must be up and running by 30/6/2009 not just ordered.

 

Cheers