Small business energy incentive
The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024External Link provides businesses with an aggregated annual turnover of less than $50 million with access to a bonus deduction equal to 20% of the cost of eligible assets or improvements to existing assets that support more efficient energy use.
This is a temporary measure to support small businesses to improve their energy efficiency and save on energy bills. The bonus deduction applies to the cost of eligible assets and improvements up to a maximum amount of $100,000, with the maximum bonus deduction being $20,000.
To claim the bonus deduction for the small business energy incentive, complete item 52 – label C Small business energy incentive and item 5 Reconciliation items – label B Expense reconciliation adjustments
For more information, see Small business energy incentive.
Small business – $20,000 instant asset write-off
The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024External Link provides a temporary increase to the instant asset write-off threshold to support small business entities (with an aggregated annual turnover of less than $10 million).
Eligible small business entities can immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that were first used or installed ready for use for a taxable purpose between 1 July 2023 and 30 June 2024.
The $20,000 threshold applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entities are also able to immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
The 5-year 'lock out' rule is suspended until 30 June 2024. This rule prevented small business entities from re-entering the simplified depreciation regime if they opted out.
To claim a deduction under the instant asset write-off, complete item 5 – label K Depreciation expenses and item 51 – label A Deduction for certain assets.
For more information, see Small business support – $20,000 instant asset write-off.
Thin capitalisation
The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Act 2024External Link amends thin capitalisation rules for income years commencing on or after 1 July 2023.
Under the new thin capitalisation rules:
- The newly classified 'general class investors' will be subject to one of 3 tests
- Fixed ratio test.
- Group ratio test.
- Third party debt test.
- Financial entities will continue to be subject to the existing safe harbour test and worldwide gearing test or may choose the new third party debt test.
- Authorised deposit-taking institutions (ADIs) will continue to be subject to the previous thin capitalisation rules.
- The arm’s length debt test has been removed for all taxpayers.
These rules are supported by the new integrity rules – debt deduction creation rules, which will apply to assessments for income years starting on or after 1 July 2024.
If your clients answer yes at item 29 – label O Did the thin capitalisation provisions affect you?, of the trust tax return 2024, they must complete and lodge an International dealings schedule 2024.
For more information, see Thin Capitalisation.
Trust income schedule
From the 2024 income year, if your clients received one or more distributions from trusts, they must complete a Trust income schedule 2024 and attach it to their trust tax return. The trust income schedule details each distribution that you receive from trusts.
Complete the schedule if your clients report a distribution from a trust at:
- item 8 Partnerships and trusts
- item 21 Capital gains
- item 22 Foreign income
- item 23 Other assessable foreign source income.
For information to help your clients complete the trust income schedule and who must complete the schedule, see Trust income schedule and instructions 2024.
New and updated labels in the trust tax return 2024
In the Trust tax return 2024, the following capital gains tax (CGT) labels have been added or updated at item 58 Statement of distribution:
- F1 Gross capital gain
- F2 Capital losses applied
- F3 CGT discount applied
- F4 CGT small business concessions applied
- F5 NCMI capital gains
- F6 Excluded from NCMI capital gains.
Removed items from the Trust tax return 2024
In the Trust tax return 2024, the following temporary full expensing labels have been removed:
- Item 50 Capital allowances
- P Are you making a choice to opt out of TFE for some or all of your eligible assets?
- Q Number of assets you are opting out for
- R Value of assets you are opting out for
- S Temporary full expensing deductions
- T Number of assets you are claiming for.