$20,000 Instant Asset Write-Off – What You Need To Know
The Australian Taxation Office (ATO) has confirmed that the $20,000 instant asset write-off continues to apply for eligible small businesses in the 2024–25 financial year. If you’re planning to upgrade equipment, purchase tools, or invest in technology, here’s what you need to know.
What Is the Instant Asset Write-Off?
The instant asset write-off allows eligible businesses to immediately deduct the full cost of eligible depreciating assets costing less than $20,000, rather than claiming depreciation over several years. This measure helps businesses manage cash flow by bringing forward tax deductions.
Key Details:
- Threshold: The asset must cost less than $20,000 (excluding GST for GST-registered businesses).
- Eligibility: Applies to businesses with an aggregated turnover of less than $10 million.
- Date of Purchase: Assets must be first used or installed ready for use between 1 July 2024 and 30 June 2025.
- Per Asset: The threshold applies per asset, so multiple assets under $20,000 can each be written off instantly.
- New and Used Assets: Both new and second-hand assets are eligible.
Exclusions:
Certain assets are excluded, such as assets leased out on a depreciating basis, horticultural plants, and capital works (e.g. buildings or structural improvements). It’s important to check whether your planned purchase qualifies.
Actions Steps:
- Keep detailed records of the purchase (invoice, payment, and usage).
- Ensure the asset is in use or ready to use before 30 June 2025 to claim the deduction in that year.
- Speak with your accountant before making large purchases to confirm eligibility and timing.
If you have questions about what you can claim or how this impacts your business tax planning, feel free to contact us.