Dear

Aeromil Pacific is pleased to provide our valued clients with this important update in relation to the proposed investment allowance and its applicability to aircraft. The draft legislation has been introduced to parliament and is due to be passed in the near future. Please feel free to call if you would like to receive any additional information.

Investment Allowance for Business

The Government has announced a tax break in the form of an investment allowance for new capital expenditure and this includes the purchase of new aircraft.

As the legislation is currently with Parliament awaiting approval, this is a very good time to consider new aircraft acquisitions as this can effectively provide a 9 percent discount on the purchase price, if you act soon and meet the eligibility criteria. For acquisitions of new aircraft, where you sign a contract for purchase by 30 June 2009 you may be able to claim a tax break of 30% as long as the aircraft is delivered by 30 June 2010.

In summary, a taxpayer can obtain the following investment allowance if it satisfies the criteria in the table below:

New investment threshold	Investment time: 13/12/08 to 30/06/09 First use time by 30/06/10	Investment time: 13/12/08 to 31/12/09 First use time by 31/12/10
Small business (turnover < $2m) - $1,000	30%	10%
Other business (turnover > $2m) - $10,000	30%	10%

We also understand that the investment allowance will not be apportioned for any non-business use of the aircraft as long as the taxpayer can demonstrate that at the time of use the asset was to be used in Australia and for the principal purpose of carrying on a business.

We invite you to contact us to discuss your aircraft requirements by calling

Nick Jones on 02 8713 1190 or via Email.



Australian Taxation Office website can be found here.