Increased instant asset write-off ending 30 June 2020

The increase in the Instant Asset Write-Off threshold to $150,000 was announced by Prime Minister Scott Morrison as part of the Federal Government’s $17.6 billion economic plan to keep Australians in jobs and keep companies in business in the face of the significant challenges posed by the spread of the COVID-19.

Previously, any Australian business with a turnover of less than $50 million could instantly write off the cost of an asset up to the cost of $30,000. The Federal Government’s recent changes lifted the asset ceiling to $150,000 and expanded to include businesses with an aggregated turnover of up to $500 million. This measure is expected to require an investment of $700 million from the Federal Government.

Eligibility for the Instant Asset Write-Off

Eligibility to use the Instant Asset Write-Off depends on:

  • Your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
  • The date you purchased the asset
  • The date the asset was first used or installed ready for use
  • The cost of each asset being less than the threshold

Businesses with a turnover of $500 million or more are not eligible to use the Instant Asset Write-Off.

Exclusions and Limits

There are a small number of assets that are excluded:

  • Assets that are leased out for more than 50% of the time on a depreciating asset lease
  • Assets 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

In addition, if you purchase a car, the Instant Asset Write-Off is limited to the business portion of the car limit up to $57,581 for the 2019–20 financial year. For example, if you use your vehicle for 75% business use, the total you can claim under the Instant Asset Write-Off is 75% of $57,581, which equals $43,186.

How to Apply

There is no specific application process. You can claim the Instant Asset Write-Off when lodging your tax return for the 2019-20 financial year.

Further Information

The information provided above is general in nature. It should not be relied upon as professional financial advice. AMGC encourages you to seek tailored, professional advice from an expert financial advisor or accountant.

For further information, visit Increasing the Instant Asset Write-Off via the website.