On 23 September 2019 the Government announced its
intention to implement two Tax Working Group recommendations. The Government
- allow a deduction for feasibility expenditure for
businesses. Previously, if expenditure related to a capital project that
expenditure would also be capital. In situations where the project does not go
ahead no deduction is allowed. Under
these proposed changes feasibility expenditure of less than $10,000 would be immediately
deductible with amounts over this threshold being spread over five years. This
includes projects that do not go ahead.
- relax the loss continuity rules to make it easier for
start-up companies to attract investment and get off the ground.
As of today no further information has been
released on these proposals. Consultation is expected to begin later in the
year. We will provide a further update
when the consultation documents have been released.