On 24 March 2020, the ATO passed the “Coronavirus Economic Response Package Omnibus Bill”, which focuses on providing support to businesses affected by COVID-19.
Included in this Bill was increasing the instant asset write-off threshold for the year ended 31st December 2020.
To be eligible to apply the instant asset write-off depends on the following:
- Your aggregated business turnover
- The date you purchased the assets
- When it was first used or installed ready for use
- The cost of the asset being less than the threshold
Please refer to the below table for the dates and thresholds applicable to each asset purchase.
|Instant asset write-off thresholds|
|Eligible businesses||Date range for when asset first used or installed ready for use||Threshold|
|Less than $500 million aggregated turnover||12 March 2020 to 30 June 2020||$150,000|
|Less than $50 million aggregated turnover||7.30pm (AEDT) on 2 April 2019 to 11 March 2020||$30,000|
|Less than $10 million aggregated turnover||29 January 2019 to 7.30pm (AEDT) on 2 April 2019||$25,000|
|Less than $10 million aggregated turnover||1 July 2016 to 28 January 2019||$20,000|
Exclusions and limits
The following assets are excluded from using the instant asset write-off:
- assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease
- assets you allocated to a low-value assets (pool) before using the simplified depreciation rules
- horticultural plants including grapevines
- software allocated to a software development pool (but not other software)
- capital works deductions.
In addition, if you purchase a car (a passenger vehicle, except a motor cycle or similar vehicle, designed to carry a load less than one tonne and fewer than nine passengers) for your business, the instant asset write-off is limited to the business portion of the car limit of $57,581 for the 2019–20 income tax year.
For more information on the eligibility or application of the Instant Asset Write-off and how this may affect you, please contact your Davidsons team member or call our office on 03 5221 6399 to speak with a Tax and Business Services Specialist.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.