InterPrac Leasing Newsletter-April 2007

Dear Member,

Year End Tax Planning

Well, with the new restrictions on taxpayers being able to claim prepayments, Year End Tax Planning has just got that much harder.  So just to remind you…..

q   STS taxpayers can still claim (deductible) prepayments up to 12 months ahead.  That means they can enter into leases of plant and equipment up to 30 June and pay and claim the next 12 month’s lease payments. 

Or, they can even enter into a one year lease, with a 65.63% residual authorised by the Tax Office in Income Tax Ruling IT 28, and can often effectively claim nearly 40% of the cost of the item.

q   STS taxpayers on a cash basis for GST can benefit from entering into a Chattel Mortgage.  Under this type of arrangement:

o      they can claim the whole amount of the GST straight back (remember you can’t do this under an HP agreement); and

o      for assets that go into the “General Depreciation Pool”, they can immediately claim 15% of the cost as depreciation. 

q   Non-STS taxpayers don’t fare so well. 

However, where they are on a cash basis for GST and they want to buy plant and equipment before year end, they too can benefit form using a Chattel Mortgage.

At least that way, they can claim the full amount of the GST back right away. 

What to do now?

InterPrac is able to offer you and your clients Leasing, Hire Purchase and Chattel Mortgage Finance through its 1800 number.

You may have seen the recent and exclusive 6.85% promotion for NTAA Members. Now we would like to help you help your clients.

 1800 700 666

Yours sincerely

Djamel Chettibi
National Leasing Manager
InterPrac Finance Services Pty Ltd
Ph: 1800 700 666
Fax: 1300 361 587
www.interprac.com.au