Good news for the visual arts sector.
The Prime Minister's budget stimulus announcement this week included an increase in the threshold of the Instant Asset Write Off Scheme from $30,000 to $150,000. Yes its true! Up to $150,000 can be claimed for purchases of artworks for your office if purchased before the end of this financial year.
If you are thinking about buying art for your office or small business this could be the ideal time. ...The $150,000 Instant Asset Write Off scheme means that you can reduce the amount of tax that your business has to pay….as long as you buy the artwork(s) before the end of this Financial Year.
If you are a small business owner, did you know that you can claim the cost of purchasing artworks for your offices as a tax deduction?
The Australian Taxation Office (ATO) classifies artworks owned by businesses as both investments and depreciating assets. AS their useful life is determined as 100 years they are subject to a very low rate of depreciation - usually around 1% per year. Ie under normal circumstances you could only claim 1% of the cost of an artwork as a tax deduction.
However, as artworks qualify under the Instant Asset Write-off Scheme (originally initiated in 2015 with a threshold of just $20,000) it is now possible to claim a complete deduction of up to $150,000 for artworks purchased by a small to medium-sized business for their premises, subject to four criteria. The artwork must be:
• Capable of being moved
• Purchased principally for display in a business premise; and
• Not be trading stock.
Under the Budget Stimulus Package announced by the Prime Minister at the onset of the Covid -19 epidemic, there is no limit to the number of artworks costing less than $150,000 for which an small to medium-sized business (with an annual turnover of less than $50 million) may claim a tax deduction.?