INSTANT ASSET WRITE-OFF
Oct 12th, 2020 • Uncategorised • Industry News • Vehicle Finance
INSTANT ASSET WRITE-OFF
Instant asset write-off is significantly expanded to businesses with aggregated annual turnover of less than $5b. This is expected to comprise 99% of total taxpayers.
Businesses with aggregated annual turnover of less than $5b will be able to immediately deduct the full cost of new depreciable assets and improvements to existing depreciable assets acquired from 7:30pm on 6 October 2020 and first used or installed ready for use by 30 June 2022.
Unlimited cap on the cost of eligible depreciable assets able to be immediately deducted.
Businesses with aggregated annual turnover of less than $5b will now be able to claim an immediate deduction for the full cost of expenditure on new Division 40 depreciable assets, or improvements to existing depreciable assets, that are first used or installed ready for use by 30 June 2022. This measure is expected to apply to 99% of taxpayers. including individuals, trusts, and companies.
This measure extends the Government’s previous instant asset write-off scheme by:
Increasing the turnover threshold to businesses with aggregated annual turnover of less than $5b (previously the turnover threshold was less than $500m)
Extending the operation of the scheme through to assets that are in use, or installed ready for use, by 30 June 2022
Removing the limit on the cost of eligible depreciating assets able to be immediately deducted under the instant asset write-off rules (previously a limit of $150,000 cost applied), meaning that eligible businesses will be able to claim a tax deduction for the full cost of eligible depreciating assets first used, or installed, by 30 June 2022
For SMEs with aggregated annual turnover of less than $50m, full expensing also applies to second-hand assets
Businesses with aggregated annual turnover less than $500m that hold eligible assets for the enhanced $150,000 instant asset write-off that are not first used, or installed ready for use, by 31 December 2020 will have an extra six months to 30 June 2021 to first use, or install those assets ready for use to claim an immediate deduction
Small businesses with aggregated annual turnover of less than $10m will be able to deduct the balance of their simplified depreciation pool at the end of the income year while full expensing applies
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