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$150k Instant Asset Write-off Extended

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If you’re in business and looking to increase or improve your assets, you now have more time to make the most of the $150k instant asset write-off scheme.

 

What is an Instant Asset Write-off?

Under an instant asset write-off, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use.

Instant asset write-off can be used for:

  • multiple assets as long as the cost of each individual asset is less than the relevant threshold
  • new and second-hand assets.

 

Why was the Instant Asset Write-off scheme extended?

As a part of the Australian Government’s COVID-19 economic response, the instant asset write-off scheme was expanded, so that businesses making up to $500 million per year were allowed to write off newly purchased assets worth up to $150,000 to the 30 June. This scheme has now been extended until the end of 2020, in hope to boost cash flow.

With the scheme in place, eligible businesses can deduct the full cost of purchases up to $150,000 from the amount of tax they pay in the financial year the asset is purchased.

The scheme can be applied to multiple assets worth up to $150,000, with the Government saying 3.5 million businesses would be able to benefit from the scheme.

Without the extension, the scheme was set to shrink substantially next month, only allowing the writing off of assets worth less than $1,000 by businesses earning less than $10 million per year.

 

What’s excluded?

The instant asset write-off cannot be used for assets that are excluded from this simple depreciation rule including:

– assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease

– assets you allocated to a low-value assets (pool) before using the simplified depreciation rules

– horticultural plants including grapevines

– software allocated to a software development pool (but not other software)
– capital works deductions.

 

Need to know more?

For further information on what you can and can’t claim and for more personal advice on your finances, don’t hesitate to contact our team of expert accountants and business advisors.

Just one conversation will help us to identify the tools you need to grow your business or personal wealth.

Contact us for a no-obligation chat today.
Torquay: (03) 5261 2262
Wincheslea: (03) 5267 2673