If you have purchased assets for your business, remember that you may be eligible to claim an immediate deduction in your 2019–2020 tax return under the instant asset write-off, which was recently expanded into 2020-21.
You now have until 31 December 2020 to acquire assets following the extension of this instant tax write off into the first half of the 2020/21 tax year.
From 12 March to 31st December 2020 inclusive, the instant asset write-off threshold for each asset increased to $150,000 (up from $30,000) for business entities with aggregated annual turnover of less than $500 million (up from $50 million).
To get it right, remember:
- check if your business is eligible;
- both new and second-hand assets can be claimed, as long as each asset costs less than $150,000;
- assets must be first used or installed ready for use between 12 March and 31 December 2020;
- a car limit applies for passenger vehicles;
- if the asset is for business and private use, only the business portion can be claimed;
- you can claim a deduction for the balance of a small business pool if its value is less than $150,000 at 30 June 2020 (before applying depreciation deductions); and
- different eligibility criteria and thresholds apply to assets first used or installed ready for use before 12 March 2020.
As always, if you would like to discuss any of these points further, please do not hesitate to contact our office on (08) 8231 2366.