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1. Indicative Property Tax Allowances Report This report is dated 11 October 2010 and has been prepared to highlight the potential capital allowances available to the purchasers of: IGA 38 - 40 Bell St, Yarra Glen VIC As Quantity Surveyors specialising in the field of property tax allowances, Napier & Blakeley Pty Ltd have prepared the following tables to highlight the approximate level of allowances available to the purchasers of the above property. We have assumed that the owner will be entitled to claim available Division 40 Capital allowances & Division 43 Capital works deductions. The figures contained in these reports reflect the allowances available under the legislation in force as at the date of preparation of the reports. Division 40 Capital allowances are calculated on the diminishing value method. Assuming that there are no restrictive clauses in the Contract of Sale the depreciating assets will be able to be depreciated on the basis of a reasonable attribution of the purchase price (Section 40-195 ITAA 1997). Depending on the date the building commenced construction, a capital works deduction will be available based on the historical cost of construction having deducted non-qualifying expenditure, and notionally depreciating the qualifying expenditure to the date of settlement. It is worth noting that should the advised purchase price or land value change, then the value of the capital allowances will also change. For further information or clarification of this report please contact Neale Scott of this office. This report is intended only to give a guide to the likely level of allowances claimable. It has been based on a preliminary appraisal of information provided. Final schedules will be necessarily based on the actual sale price. 38 - 40 Bell St Page 2 Yarra Glen VIC File Ref: 3775058246 - NS 11 October 2010
IGA, 38 - 40 Bell St Yarra Glen, VIC Indication of capital allowances deductions Prepared for: Fitzroys Napier & Blakeley Pty Ltd ACN: 006 386 278 Level 13 90 Collins Street Melbourne VIC 3000 T 03 9915 6300 F 03 9915 6399 www.napierblakeley.com Input Data Year 1 Increase in Cashflow Purchase Price Land Value Net Rental Income Assumed Settlement Date Passing Yield 7.4% After Tax Return (Year 1) Tax Rate Yield With Depreciation Yield Without Depreciation 45% 5.5% 4.1% 30% 6.1% 5.2% $ 8,000,000 $ 1,319,000 $ 594,780 01 Jul 10 15% 6.8% 6.3% 40% 35% 30% 25% 20% 15% 10% 5% 0% 33.87% 17.74% 7.31% 45% 30% 15% Tax Rate Estimated Allowances Estimated Allowances Year 1 ( 365 days ) Division 40 Deductions $ 140,900 Division 43 Deductions $ 105,300 Annual Totals $ 246,200 300,000 250,000 Division 40 Allowances Division 43 Deductions 2 3 146,000 114,300 105,300 105,300 251,300 219,600 200,000 4 5 91,800 75,500 105,300 105,300 197,100 180,800 150,000 6 7 63,300 53,900 105,300 168,600 105,300 159,200 100,000 8 9 46,400 40,400 105,300 105,300 151,700 145,700 50,000 10 11+ TOTAL 35,500 105,300 140,800 327,800 2,948,400 3,276,200 1,135,800 4,001,400 5,137,200 0 1 2 3 4 5 6 7 8 9 10 Year These figures are of a general nature and should not be applied or acted upon unless supported by specific advice, they CAN NOT be used for tax purposes. Depreciation of Depreciating Assets is based on the DIMINISHING VALUE METHOD and the Division 43 Allowances are calculated on the PRIME COST METHOD. A claim will be dependent on a purchaser's tax position and the sales contract allowing the depreciation assets to be re-valued. SPECIFIC ADVICE IS AVAILABLE BY TELEPHONING NEALE SCOTT on 03 9915 6300 3775058246 NS Sydney Melbourne Brisbane Gold Coast Sunshine Coast Adelaide 02 9299 1899 03 9915 6300 07 3221 8255 07 5570 6432 07 5479 3566 08 8274 3760 NOT ACCEPTABLE FOR TAX RETURNS Page 3
Page 1 and 2: Ritchies Supa IGA Yarra Glen Inform
Page 3 and 4: 107-115 Manningham Street, Parkvill
Page 19: APPENDIX I DEPRECIATION SCHEDULE

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