Timing is everything with the instant asset write-off

There have been changes to the instant asset write-off which has now been increased and extended to June 2020. The policy also now includes businesses earning less than $50 million. It is important to note that the instant asset write-off can only be used for legitimate business expenses like work vehicles, tools and office equipment. It is not intended as a tax hand-out, but rather it simply brings forward depreciation that you would normally claim over a number of years. However, there is a catch. Although the instant asset write-off threshold has now increased to $30,000, in the rush to get the policy approved before the election, how much you can actually claim in the 2018/19 year depends on exactly when you bought the asset. Assets bought before April 2 attract the lower rates.

Timing details

If you are a business owner with turnover of less than $50 million, you can immediately deduct the business portion of most assets that each cost less than $30,000 if they are first used or installed ready for use from 7.30pm (AEDT) 2 April 2019 to 30 June 2020. However, if the asset was purchased between 29 January 2019 until 7.30pm (AEDT) 2 April 2019 only businesses earning less than $10 million qualify and can claim the business portion for assets costing less than $25,000 each. And for assets bought before 29 January 2019, the threshold for these businesses is only $20,000.

Assets purchased for $30,000 or more, still attract the general depreciation rules.

If you have any questions about the Instant Asset Tax Write Off, please call us on (08) 8272 5620

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