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Business taxpayers
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• nTaxpayers should review all outstanding debtsnbefore year-end to identify any debtors who may be unable to pay their bills.nOnce a taxpayer has done everything in their power to seek repayment of thendebt, they may consider writing off the balance as bad debt.
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• nThe entitlement of corporate tax entities tondeductions in respect of prior year losses is subject to certain restrictions.nAn entity needs to satisfy the “continuity of ownership” test before deductingnprior year losses. If the continuity of ownership test is failed, the entitynmay still deduct the loss if it satisfies the same business test.
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• nA deduction may be available on the disposal ofna depreciating asset if a taxpayer stops using it and expects never to use itnagain. Therefore, asset registers may need to be reviewed for any assets thatnfit this category.
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• nSmall business entities are entitled to annoutright deduction for the taxable purpose proportion of the adjustable valuenof a depreciating asset, subject to conditions.
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Non-business taxpayers
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• nNon-business taxpayers are entitled to annimmediate deduction for assets that are used predominantly to producenassessable income and that cost $300 or less, subject to conditions.
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• nSelf-employed and other eligible people arenentitled to a deduction for personal superannuation contributions, subject tonmeeting conditions such as the “10{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} rule”.
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Important: Clients should not act solely on the basis of the material contained in Update. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. This update is issued as a helpful guide to clients and for their private information.