The instant asset write off concession was increased from $30,000 to $150,000 effective from 12 March 2020 and was one of the measures that the government announced to stimulate the economy during the COVID-19 pandemic. This concession was due to end on 30 June 2020.
Yesterday the government announced that the instant asset write off concession will be extended to 31 December 2020 which means that eligible businesses can now also claim an immediate deduction for depreciating assets costing less than $150,000 in the 2020/21 financial year.
The immediate deduction is available for both new and second-hand assets but certain assets are specifically excluded; for example:
- buildings and leasehold improvements that fall under the capital works deduction regime;
- software allocated to a software development pool (but not other software);
- horticultural plants and other certain assets used in the primary production; and
- assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease.
Eligible businesses acquiring cars as depreciating assets can only claim up to the car limit of $57,581 for the 2019-20 financial year where the car is a passenger vehicle – except motor cycles or similar vehicles – designed to carry a load less than one tonne and fewer than 9 passengers. However, immediate deductions for other vehicles such as panel vans, utilities, trucks and machinery that are designed to carry a load of more than 1 tonne and/or more than 8 passengers can still be claimed where the cost of the vehicles are less than $150,000.
If you have any questions about the instant asset write off measures or any other tax matters, please call the office on 9321 4974.
