Eligible businesses that acquire eligible new or second-hand assets under the $150,000 instant asset write-off by 31 December 2020 will have an extra six months, until 30 June 2021, to first use or install those assets.
Under the instant asset write-off, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use.
Instant asset write-off can be used for:
- multiple assets as long as the cost of each individual asset is less than the relevant threshold
- new and second-hand assets
From 12 March 2020 until 31 December 2020 the instant asset write-off:
- threshold amount for each asset in $150,000 (up from $30,000)
- eligibility has been expanded to cover business with an aggregated turnover of less than $500 million (up from $50 million).
A significant exclusion is Cars! A car limit applies to the cost of passenger vehicles (except a motorcycle or similar vehicle) designed to carry a load less than one tonne and fewer than nine passengers. The one-tonne capacity relates to the maximum load your vehicle can carry, also known as the payload capacity.
The payload capacity is the gross vehicle mass (GVM) as specified on the compliance plate by the manufacturer, reduced by the basic kerb weight of the vehicle.
The basic kerb weight is the weight of the vehicle with a full tank of fuel, oil and coolant together with spare wheel, tools (including jack) and factory-installed options. It does not include the weight of passengers, goods or accessories.
Payload Capacity = GVM – basic kerb weight
The car limit is:
$57,581 for the 2019-20 income tax year
$59, 136 for the year 2020-21 income year.
The instant asset write-off is limited to the business portion of the car limit for the relevant income tax year. For example, the car limit is $57,581 for the 2019-20 income tax year. If you use your vehicle for 75% business use, the total you can claim under the instant asset write-off is 75% of $57,581, which equals $43,186.
