Did you know the Federal Government has increased the instant asset write-off from $30,000 to $150,000?
From now until June 30 2020, you can use the instant write-off to claim an immediate deduction when you purchase a new or used car.
As 30 June 2020 is only three months away, you will need to act quickly to take full advantage of this measure. Where the asset is not purchased and used by 30 June 2020, the second measure introduced by the Government regarding accelerated depreciation may alternatively be of benefit.
Accelerated depreciation deduction
The Government has additionally introduced an accelerated depreciation deduction incentive for businesses with an aggregated annual turnover of less than $500 million. This will be relevant for eligible expenditure that does not fall within the above instant asset write-off, either because the item exceeds the $150,000 threshold or the item is not first used by 30 June 2020.
Businesses will be eligible to deduct 50% of the cost of an ‘eligible’ asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
‘Eligible’ assets subject to this measure refer to new assets acquired that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (i.e. plant, equipment and specified intangible assets) acquired after the announcement and first used or installed by 30 June 2021.
Notably, this incentive does not apply to:
- Second-hand Division 40 assets, or
- Buildings and other capital works that would be depreciable under