Purchasing Artworks for Business.
Can you claim your Artwork purchase through the Australian Government Instant Asset Write-off Scheme.
Information below may help you with your decision.
Main changes to the scheme:
- The instant asset write-off scheme expanded in March to support businesses through the pandemic, from 12 March 2020 until 3o June 2023.
- Each asset threshold has increased to $150,000 (up from $30,000) eligibility has been expanded to cover businesses with an aggregated turnover of less than $5 Billion (up from $500 million)
ATO considers artworks owned by businesses as both investments and depreciating assets this includes new and second hand artworks.
Due to their useful life as being determined as 100 years they are subject to a very low rate of depreciation – usually around 1% per year, this is a very slow way of claiming deductions.
From 12 March 2020 until 30 June 2023 that has changed under the Instant Asset Write-off Scheme.
Now when you purchase under the Scheme it is possible to claim a complete deduction of up to $150,000 for artworks.
As long as the purchase by the small to medium-sized business is for their premises, and is subject to following four criteria.
The artwork must be:
- Tangible.
- Capable of being moved.
- Purchased principally for display in a business premise.
- Not be trading stock.
Can Employees claim cost of artworks.
It is possible also for employees that work from home or have been forced to work from home because of Covid-19 to make claim for the cost of Artworks in their office space.
The criteria is different for employees, as opposed to that of small business. You can read more on whether you’re eligible by clicking the following link.
Buying any asset for your business can be quite tricky, so buying art for your business for tax deductions may or maynot be right for you; if you are buying art to enhance the aesthetic feel of the office then purchasing art can return untold benefits and prove to be a good investment after all.
For further reading on whether art might be the right investment for you in your office space: Read our Blog Artwork’s in a class of its own?
PLEASE NOTE:
Some exclusions and limits apply, the above information is for informational purposes only and should not be taken as financial advice.
You should seek an independent financial advice consultant or tax adviser before proceeding with any financial decision.
The McCorry Collection Gallery and its directors are not tax advisers or financial advice consultants.
Further Reading: