The details
- The commercial property is an office with an attached warehouse, purchased recently for $4.2m
- Comprising of a large workshop and storage floor area with raking and stock operating minor assembly lines and moveable industrial vehicles/forklift equipment
- Total gross lettable area for the site is 2,875 sqm, split across two separate tenancy areas
- Building features: storerooms, internal lab, staff room, meeting rooms, loading bays, 39-car parks
In this example we can see that the tax depreciation assessment undertaken had a massive impact on the tax amount claimable, with a claimable depreciation net amount sitting at $52,064 per annum. This depreciation is not a real cash flow, however, will be allocated to existing losses, or may be offset against taxable net income/profit depending on the case
| No Tax Depreciation Claim Applied | Tax Depreciation Claim $173,546 p/a Applied | ||
| Total Annual Income: ($25,548 p/m) | $306,576 | Total Annual Income: ($25,548 p/m) | $306,576 |
| Total Annual Expenses: | ($126,530) | Total Annual Expenses: (p/a) | ($126,530) |
| Cash Income minus Expenses | $180,046 | Cash Income minus Expenses | $180,046 |
| Tax Depreciation Claimed: | $ – | Tax Depreciation Claimed: | ($173,546) |
| Pre-Tax Loss: | $180,046 | Pre-Tax Loss: | $6,500 |
| Tax Refund (@30%) | ($54,014) | Tax Refund (@30%) | ($1,950) |
| Net Annual Cash Position: | $126,032 | Net Annual Cash Position: | $178,096 |
| Monthly After Tax Cash Position | $10,503 | Monthly After Tax Cash Position | $14,841 |
| The additional tax benefit per annum amounts to $52,064 |
Disclaimer: The tax depreciation amount within this case study relates to the first year claim and will vary depending on the method and asset allocations considered for tax depreciation. It will be different for each case and assessed on the business infrastructure, equipment/chattels and capital expenditure on the property recently