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Kehoma R.
Kehoma R.
Silverleaves, VIC
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Hi I am currently preparing my husband and I company tax return ourselves, and have got through it all with no problems until I came to section 9. Capital Allowances.

My question is what details do I put in or not put in

"other depreciating assets first deducted"

It may not be relevant to us this financial year but our bookkeeper had filled in a number the past 2 years so I am unsure??

2 weeks ago

Responses

Hi Kehoma,

good on for you for having a crack!! a company tax return can be a nightmare for the unwary, but as long as you understand what you are doing, its not the most complicated document to complete.

to get to section 9 before you hit a hurdle is either great news because its almost done, or bad news because you have missed some important sections.

So if I mention a few items for you to look at, and you say to yourself "Ha! All over that one!!!" then happy days, but if you say "Never heard of it" then you probably want to get an accountant involved to make sure you arent shooting yourself in the foot.

S3 F1 and F2 these are questions regarding whether your company is a small business entity
S6 X depreciation (which is not tax deductible)
S7W non deductible expenses (eg depreciation)
S7F deduction for decline in value of depreciating assets (which IS deductible)
S8J total debt
S8M franking account balance
S8N loans to associates
S8Q payments to associated persons

then we get to S9, which deals with depreciating assets. If you have claimed depreciation and or decline in value of depreciating assets then you should not have any trouble answering the questions at 9B and 9C and D, E F G H and I.

this is because you have calculated the accounting depreciation (which aint deductible) and put this in 6X, and also calculated the deduction for decline in value of depreciating assets (which is) and put this at item 6F. And you have also included depreciation at 6W, because depreciation isnt deductible for tax purposes......

And if you have covered off all those items then you will already know what your new assets are for the year, and also know what the adjustable values are at the end of the year, and all this will fill itself out based on numbers you have already calculated in respect of both depreciation (which isnt tax deductible) and decline in value of depreciating assets, (which is)

then all of this will flow through to the calculation statement where you advise the ATO what the taxable income is and tell them how much tax you have to pay

easy peasy.

but IF you dont know what your depreciating assets first deducted are, I strongly suspect you might have incorrectly filled out other parts of the return. So on that basis I STRONGLY urge you to take your figures to a qualified accountant, who can help you through this process. You have obligations as a director of the company to report things accurately, and the ATO takes a dim view of directors who dont report figures the way they aught to.

good luck!!!

Brendan

Comments

I have filled out the sections you have mentioned that are relevant yes.

I have a depreciation expense figure S6 X

and yes I have a deduction for decline in value of depreciating assets figure S7 F.

But which figures am I adding to answer section 9? I just don't understand what it is asking for? I have read the instructions on ATO website for this section and I just don't get it. Yes I most likely will take this all to an accountant but I want to understand what its asking for?

Does it want the new value of the depreciating asset/s?

here is the link to the company tax return instructions and an extract of the instructions (I know you have already read this, but if anyone is crazy enough to read this on a Friday night, the link will help them:)

so, in short: yes, you are right. Any NEW depreciating TANGIBLE assets go in here:)

regards
BC

https://www.ato.gov.au/forms/company-tax-return-instructions-2018/?page=14#9__Capital_allowances

B Other depreciating assets first deducted
A depreciating asset that the company holds starts to decline in value from the time the company uses it (or installs it ready for use) for any purpose. However, the company can only claim a deduction for the decline in value to the extent it uses the asset for a taxable purpose, such as for producing assessable income.

Write at B the cost of all depreciating assets (other than intangible depreciating assets) for which the company is claiming a deduction for the decline in value for the first time.

If the company has allocated any assets (other than intangible depreciating assets) with a cost of less than $1,000 to a low-value pool for the income year, also include the cost of those assets at B. Do not reduce the cost for estimated non-taxable use.

Comments

Ok great thanks so much.

So if we have not purchased any new depreciating assets this financial year, I leave it blank?

thats about it:)

cheers
bc

Comments

Thank you!! Absolute legend :)

Sorry one more question. Do I have to attach any other supporting documents to the Return or just the signed return itself?

I have never attached supporting docs to a tax return. If the ATO wants to see something I am sure they will let you know:)

cheers
bc

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