Instant Asset Write-Off | Federal Budget 2020-21 Considerations
Tax Law - 07 Oct 2020
The Government has now relaxed the rules around instant asset write -off allowing a higher threshold to benefit small and medium businesses. Under the instant asset write-off, eligible businesses with an aggregated turnover of less than $5b who acquire an eligible depreciating asset after 7.30pm on 6 October 2020 can claim an immediate deduction (up to $150,000 for each asset) for the asset’s cost, or for the cost of improving the asset, in the year the asset is first used or installed ready for use.
Businesses with a turnover of less than $50m can also claim an immediate deduction (up to $150,000 for each asset) for the cost of a second hand eligible depreciating asset.
In each case the asset must be used (or installed ready for use) by 30 June 2022.
Where a business with an aggregated turnover of between $50 and $500m have already acquired an eligible depreciating asset with a cost less than $150,000 under the pre-existing rules, they will have an additional six months to first use or install the asset, from 31 December 2020 to 30 June 2021.
Small businesses (with an aggregated turnover of less than $10m) can also deduct their total simplified depreciating pool at the end of the income years ending 30 June 2021 to 30 June 2022 inclusive.
Co-written by Ally Evans & Chelsea Fennell
The information contained in this blog is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. In all cases, you should consult with a professional advisor familiar with your factual situation for advice concerning specific matters before making any decisions. By reading this blog, you confirm your understanding of this disclaimer.