The key features of STS are:
- Cash accounting rather than accruals accounting
- Most business income and deductions will be recognised only when they are received and paid.
- Depreciating assets that cost less than $1000 each will be written off immediately and claimed as a deduction in the year in which you started using the asset or installed it ready for use, for a taxable purpose.
- Other depreciating assets which have an effective life of less than 25 years will be pooled and depreciated at the diminishing value rate of 30%.
- Depreciating assets with an effective life of 25 years or more will be pooled and depreciated at the diminishing value rate of 5%
- Tax payers will only be required to account for changes in their trading stock on hand or do stock takes at the end of the year where the difference between the value of opening stock and your reasonable estimate of closing stock exceeds $5000.
- Be carrying on a business in that year
- Have an STS average turnoverfor that year of less than $1m
- Have the total of the adjustable values of the depreciating assets held by you and your grouped entities at the end of that yearas less than $3m.