Changes to the immediate asset write-off

Posted on 20th May 2019 by Christabelle Harris

The immediate asset write-off is a deduction that eligible businesses can claim for the purchase of new or second-hand fixed assets. Examples of the type of assets that can be immediately written off include manufacturing equipment, vehicles, tools and office & retail equipment.

Both houses of Parliament have approved the federal government’s bill to lift the instant asset write-off for small business entities (SBEs) to $30,000.

There are three core eligibility criteria that must be met in order to access the immediate write-off:

  1. The business purchasing the asset must qualify as a small business by having an aggregated business turnover of less than
    • $50 million from 2 April 2019
    • $10 million from 1 July 2016
    • $2 million for previous years;
  2. The asset purchased must be used or at minimum installed ready for use in the income year the deduction is to be claimed;
  3. The asset purchase must be less than a threshold which is different subject to the date the asset was acquired, the most recent threshold being set at $30,000.

Benefits of the write-off

It is important to note that the immediate write off is not a free handout.  The concept of the write-off is that you are bringing forward tax deductions you would have claimed anyway.

The benefit comes from the fact that you can claim the full deduction in year one, reducing your tax liability in that year as opposed to a reduced liability over a number of years.

It is important to remember that when considering the purchase of an asset for your business, the asset must have an immediate benefit to your business and your cashflow must be able to support the purchase.

Important dates and corresponding thresholds

Date Range Threshold per asset
7:30 pm (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

Should you have any queries regarding the above information please do not hesitate to contact us on (08) 9316 7000.

Enter your details here to subscribe to our newsletter:

sign up