Instant Asset Write-Off

The Federal Government has announced an extension of the Instant Asset Write-off which allows businesses who invest in vehicles and equipment to claim a one-off tax deduction on individual assets.

What is the instant asset write-off?

• It's a one-off tax deduction businesses can claim for business equipment purchases

• The current threshold is $150,000 for each asset first used or installed and ready for use between 12 March and 31 December 2020

• Claim your deduction in the same financial year you finance the equipment

• You may be able to claim more than one asset as long as each individual asset is below the $150,000 limit

• You can borrow to fund the purchase of equipment and still claim a 100% deduction for the cost of eligible items

Does my business qualify?

• To qualify, your business must have an aggregated turnover of less than $500 million

Can I buy anything I want?

• You can claim new or used assets up to the value of $150,000 each.

• The write-off is only available where the asset is used for business purposes

• Not every purchase or expenditure may qualify, so you'll need to seek your own independent taxation advice before buying

What if the equipment I want costs more than $150,000?

• Speak to an accountant or tax advisor if your equipment costs more than $150,000

• You may be able to use the new 15 month investment incentive, which allows a deduction for 50% of the cost of a new asset

• Existing depreciation rules apply to the balance of the asset's cost

You can borrow and still claim the write-off

• You may still be able to claim a deduction if you have the title to the goods – using a chattel mortgage or equipment loan, for example, rather than a lease arrangement.

• You can also use the same finance facility to buy several assets and claim the deduction on all of them provided each individual whole item costs less than $150,000.