Originally announced in March 2020, the instant asset write-off threshold increased to $150,000 and has now been extended until 31 December 2020. Initially, the increased threshold was intended to run until 30 June 2020, and allowed eligible businesses with a turn-over of less than $500 million to claim an immediate tax deduction for assets, where the total cost was less than $150,000.

It is important to note however that certain exclusions and limits apply. Most notably, the allowable deduction for the purchase of a new motor vehicle for business purposes is still capped at the car depreciation cost limit of $57,581, which can be further reduced if the vehicle use is apportioned based on private and business usage. Additionally, items which are leased out for more than 50% of the time, assets included in low value pools, and capital works deductions are also not eligible for the $150,000 instant asset write-off.

The following tips can help you get your instant asset write-off claim right:

  • check if you’re an eligible business
  • both new and second-hand assets can be claimed, provided each asset costs less than $150,000
  • assets must be first used or installed ready for use between 12 March 2020 and 30 June 2020
  • a car limit applies to passenger vehicles. The limit is $57,581 for the 2019–20 income tax year
  • if your asset is for business and private use, you can only claim the business portion
  • different eligibility criteria and thresholds apply to assets first used, or installed ready for use, prior to 12 March 2020.

If you do not use the simplified depreciation rules, you may be eligible to deduct an amount using accelerated depreciation if the asset is an eligible asset.

If you have any queries, please feel free to contact our friendly team on (08) 9327 1777.

For more information from the Australian Taxation Office, click here.