ARTICLES & INFO
Tax & GST

INSTANT ASSET WRITE OFF

15
Apr

INSTANT ASSET WRITE OFF

Monday, April 15, 2019

Just weeks after the Federal Government announced an increase to the Instant Asset Write off from $20k to $25k, it seems Christmas may have come early many SME's.

As part of the Federal Budget released by treasurer Josh Frydenberg, the write-off will now be increased from $25,000 to $30,000, and extended with an annual turnover of up to $50 million (up from $10 million previously), and can be used multiple times for multiple assets.

The Government says 3.4 million businesses are now eligible for the write-off.

The new $30,000 limit came into effect 2 April, at 7.30pm, and continues through to June 30, 2020.

On the downside, the arrangement could be temporary and dependent on the current Government being re-elected in May.

This will open up the write-off to an additional 220,000 businesses, according to the treasurer and expected to cost an additional $400 million, in addition to the $750 million earmarked for January's proposal to raise the threshold from $20,000 to $25,000.

Effectively, there will be three tiers to consider within the 2019 financial year:

i)  the first tier will be the $20,000 threshold for depreciable assets that are acquired before 29 January, 2019 (businesses with a turnover of less than $10 million only)

ii) the second tier being the $25,000 threshold for assets first used or installed between 29 January, 2019 and 2 April, 2019 (businesses with a turnover of less than $10 million only)

iii) the third tier being the $30,000 threshold for assets first used and installed after the 2 April, 2019 budget announcement and before1 July 2020 (businesses with a turnover of less than $50 million)

The instant asset write-off threshold reverts back to $1,000 for small business entities (businesses with a turnover of less than $10million) only from 1 July, 2020.

Ordinary depreciation rules will need to be used by medium-sized business entities (businesses with a turnover of more than $10million and less than $50 million) from 1 July, 2020.

Posted on:

Monday, April 15, 2019

in

Tax & GST

category

The Blog