Instant asset write-off thresholds
Note the instant asset write off threshold for qualifying business is currently $30,000.00 reverting back to $1,000.00 on the 1st July 2020.
To determine if your business qualifies for the instant asset write off, or the asset you are purchasing qualifies for the instant asset write off, speak with your accountant.
ATO Report October 2019
Using the simplified depreciation rules, assets costing less than the relevant instant asset write-off threshold are written off in the year they are first used, or installed ready-for-use. This threshold applies to each asset irrespective of whether the asset is purchased new or second-hand.
The threshold has changed over the last few years and during the current year as shown in the table below.
| Date range | Threshold for
each asset |
|---|---|
| 7:30pm (AEDT) 02/04/2019 to 30/06/2020 |
$30,000 |
| 29/01/2019 to before 7.30pm (AEDT) 02/04/2019 |
$25,000 |
| 7.30pm (AEST) 12/05/2015 to 28/01/2019 |
$20,000 |
| 01/01/2014 to prior to 7.30pm (AEST) 12/05/2015 |
$1,000 |
| 01/07/2012 to 31/12/2013 |
$6,500 |
| 01/07/2011 to 30/06/2012 |
$1,000 |
The threshold reverts to $1,000 from 1 July 2020.
The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount. Whether the threshold is GST exclusive or inclusive will depend on your GST status, for further information about GST impacts see Cost.
In working out the amount you can claim, you must subtract any private use proportion. The balance (that is the proportion used in earning assessable income) is generally the taxable purpose proportion. While only the taxable purpose proportion is deductible, the entire cost of the asset must be less than the threshold.
Note that if you later sell or dispose of an asset for which you claimed an instant asset write-off, you include the taxable purpose proportion of the amount you received for the asset in your assessable income.
Source: Australian Taxation Office
Date: 24th October 2019
If you require assistance with the instant asset write off, contact Coffs Coast Consulting on (02) 5606 3692.
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