As there is a lot of discussion about the immediate write-off for small businesses we have summarized the key facts below.

The write-off threshold was previously $1,000 and the concession only applies to businesses with an aggregate annual turnover of less than $2 million.

Key Conditions For The Immediate Write Off:

  • The Asset must be used for income-producing purposes.
  • Applies to assets that were first acquired at or after 7.30 p.m.(AEST) on 12 May 2015 and they were first used (or installed ready to use) on or before 30 June 2017

Key Features Of The Write-Off Rules

  •  The asset can be new or second-hand asset
  •  Deduction is claimed in the income year in which the asset was first installed or used
  • The total cost must be $20,000 or less
  • On a per asset basis, so several assets each costing less than $20,000 would qualify
  • Assets that costs $20,000 or more cannot be deducted immediately and will continue to be deducted over time using a small business pool
  •  Low pool value threshold will also increase to $20,000
  •  This means an immediate deduction is available if the pool balance is less than $20,000 at the end of an income year

What Is Not Included?

  • There are a small number of assets that are not eligible for accelerated depreciation, for example, horticultural plants that have specialized depreciation rules.

Consult Your Accountant Before Buying New Assets

It is adviceable to consult with your accountant to discuss the details of the $20,000 immediate deduction rules before purchasing any major assets. It also needs to be noted that there are other factors to consider not just tax advantages which your accountant can discuss with you so you can make an informed decision.