Instant asset write-off extended for small business
22 May, 2024

Instant asset write-off extended for small business

As part of the 2024 Federal Budget, the Federal government has announced a one year extension to the increase in the instant asset write-off threshold to $20,000.

With the temporary threshold increase announced (yet to be legislated) in the 2023 Federal Budget due to expire on 30 June 2024, this extension means small businesses can immediately deduct the cost of eligible assets in their 2024-25 income tax return.

Eligibility criteria

The following conditions must be satisfied in order to be eligible for the instant asset write-off:

  • The asset must be first installed or ready to use between 1 July 2024 and 30 June 2025
  • The asset must cost less than $20,000
  • The annual aggregated turnover of the business must be less than $10 million.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

Assets valued over the threshold

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.

Next steps

Small businesses can continue the approach from the previous income year and immediately deduct assets eligible for the instant asset write off.

The provisions that prevent small businesses from re-entering the simplified depreciation regime (lockout rules) for five years if they opt-out will continue to be suspended until 30 June 2025.

 

Disclaimer: This article is provided as general information only and does not consider your specific situation, objectives, or needs. It does not represent accounting or tax advice upon which any person may act. Implementation and suitability require a detailed analysis of your specific circumstances. Before taking any action, consider your own circumstances and seek professional advice.

Please contact us for advice specific to you and your circumstances.

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