Instant asset write-off
Flor- Hanly - Sunday, February 24, 2019
Legislation proposed to increase instant asset write-off threshold
Using the simplified depreciation rules, assets costing less than the instant asset write-off threshold are written off in the year they are bought and used, or installed ready-for-use.
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This applies irrespective of whether the asset is purchased new or second-hand.The current threshold is $20,000. It has changed over the last few years as shown in the table.
The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount. This table assumes that you are not registered for GST, for further information about GST impacts see Cost.
In working out the amount you can claim, you must subtract any private use proportion. The balance (that is the proportion used in earning assessable income) is generally the taxable purpose proportion. While only the taxable purpose proportion is deductible, the entire cost of the asset must be less than the threshold.
Note that if you later sell or dispose of an asset for which you claimed an instant asset write-off, you include the taxable purpose proportion of the amount you received for the asset in your assessable income.
Instant asset write-off thresholds
| Date range | Threshold |
| 7.30pm (AEST) 12/05/2015 to 30/6/2019 |
$20,000 |
| 01/01/2014 to prior to 7.30pm (AEST) 12/05/2015 |
$1,000 |
| 01/07/2012 to 31/12/2013 |
$6,500 |
| 01/07/2011 to 30/06/2012 |
$1,000 |
On 29 January 2019, the Prime Minister announced that the government will introduce legislation to increase the $20,000 instant asset write-off threshold to $25,000 from 29 January 2019 until 30 June 2020.
This proposal is not yet law.
The entire cost of the asset must be less than the instant asset write-off threshold, irrespective of any trade-in amount. This table assumes that you are not registered for GST, for further information about GST impacts see Cost.
In working out the amount you can claim, you must subtract any private use proportion. The balance (that is the proportion used in earning assessable income) is generally the taxable purpose proportion. While only the taxable purpose proportion is deductible, the entire cost of the asset must be less than the threshold.
Note that if you later sell or dispose of an asset for which you claimed an instant asset write-off, you include the taxable purpose proportion of the amount you received for the asset in your assessable income.
Taxation planning is a crucial part of planning and running your business and personal finances. Planning should be done early in the year and over the long term (several years).
As tax planning should integrate with your overall plans and goals, call Flor-Hanly Accountants in Mackay on 07 4963 4800.
Source ATO
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