Instant Asset Write Off

Instant Asset Write Off- 2019 – 2020

 

The  Federal Budget 2019 announced to give medium-sized businesses (turnover greater than $10M but less than $50M) the ability to immediately deduct the cost of assets costing less than $30,000 is now law.

The new Act also increases the current threshold for the instant asset write off for small businesses (turnover less than $10M) from $25,000 to $30,000.

The changes to the instant asset write off for  this financial year is mentioned below as a quick snapshot :

Date assets purchased Business Turnover Instant Asset Write Off
1/7/2018 – 28/1/2019 Less than $10M Less than $20,000
29/1/2019 – 1/4/2019 Less than $10M Less than $25,000
2/4/2019 – 30/6/2020 Less than $50M Less than $30,000

 

It is important to note that it is the date the asset is installed and ready for use in your business that determines the date that the instant asset write off applies.

Also, the cost of the asset includes all costs involved in getting the asset ready for use, such as installation and delivery costs.

Assets that exceed the thresholds outlined above and cannot be instantly written off and need to considered as mentioned below:
Small businesses -(turnover less than $10M)

Can use the small business pool and claim a 15% deduction in the first year and 30% each year after

Medium businesses (turnover greater than $10M but less than $50M)

Need to use the general depreciation rules.

For more information on Instant Asset Write Off, visit ATO Website from the below link

https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/In-detail/Depreciating-assets/Simplified-depreciation—rules-and-calculations/?page=4

 

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