Instant asset write off for businesses – it’s still around! But don’t’ go buying a luxury vehicle just yet.
One of the best tax breaks for many businesses in recent years has been the Instant Asset Write-Off, which offers a means to acquiring capital assets, and gaining an immediate tax deduction.
As part of the Federal Government’s Coronavirus Stimulus Package, the Instant Asset Write-Off threshold increased from $30,000 to $150,000 (net of GST) per asset acquired.
The change at the time applied to businesses with an aggregated annual turnover of less than $500 million, where those assets were first used or installed ready for use between 12 March 2020 and 30 June 2021 and purchased by 31 December 2020.
The Instant Asset Write-Off has now since been extended to until 30 June
2023, as per the announcement in the recently concluded Federal Budget.
Currently, an immediate deduction is allowable for purchases of new depreciating assets (for businesses with an aggregated turnover under $5 billion), and eligible second-hand assets (for businesses with aggregated turnover under $50 million).
However, there is one catch. Anybody buying a new Motor Vehicle for business purposes can only claim the maximum depreciation write-off limit of $59,136 (current as of 2020/21), even if the full purchase price was higher.
The Motor Vehicle depreciation write off limit applies to vehicles with carrying capacity limits of one tonne, and nine passengers.