Extension of temporary full expensing regime
The Federal Government has announced a 12 month extension of the temporary full expensing regime a part of the 2021-2022 Federal Budget. Under the extended regime, businesses with an aggregated annual turnover of up to $5 billion can deduct the full cost of eligible assets (including intangibles) acquired from 7:30pm on 6 October 2020 and first used or installed ready for use by 30 June 2023.
Introduction of self-assessed effective life for intangible assets
The Federal Government has also announced that the income tax laws will be amended to allow taxpayers to self-assess the effective life of certain depreciating intangible assets instead of using a prescribed statutory effective life. The amendments will apply to eligible intangibles acquired after 30 June 2023, being the extended end date for the temporary full expensing regime.
From 1 July 2023, taxpayers will have the option to bring forward deductions for the depreciation of intangibles if the self-assessed effective life is shorter than the statutory effective life. Intangibles that can be self-assessed in this way include patents, registered designs, copyrights, in-house software, and licences.
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