$150,000 Instant Asset Write Off

– Great news, but it has some strings attached.

Benefit

The Government is increasing the instant asset write off threshold from $30,000 to $150,000

Eligibility

All businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30th June 2020.

Asset by Asset

The $150,000 threshold applies on a per asset basis, so eligible businesses can immediately write off multiple asset purchases this year.

Timing

This proposal applies immediately and until 30th June 2020.

What’s covered

New or second-hand assets first used or installed ready for use by 30th June 2020.

However, it’s all over by 1st July 2020

The instant asset write off threshold is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1st July 2020.

Buy now

Assuming that you’d already planned some capital expenditure in the near future, there is now a significant incentive to buy your new or second-hand assets and have them installed ready for use prior to 30th June 2020.

A $100,000 asset purchased before 30th June will reduce your tax bill by $30,000 in the current year, while the same asset bought a week later and depreciated over 15 years would save you $0 in 2020 and only $2,000 per annum thereafter.

Advice
If you need advice on the tax changes, contact Noel May or Amanda Klye on (03) 9585 7555 orenquiries@mktax.com.au

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