Legislation was recently passed that increased the instant asset write-off threshold to $20,000 for 1^st July 2023 to 30^th June 2024.

Eligibility to access the instant asset write-off looks at both the asset and business. To be eligible the:

Business entity must:

• Be carrying on a business,
• Have an aggregated annual turnover of less than $10m, and
• Choose to apply the simplified depreciation rules for the 2024 financial year.

Asset must:

• Cost less than $20,000 (less than $20,000 after applying GST credits for businesses that are registered for GST, or $20,000 including GST for businesses that are not registered for GST),
• Be classified as a depreciating asset, and
• Be first used or installed ready for use between 1^st July 2023 to 30^th June 2024 for a business purpose.

Eligible assets can be either new or second-hand. In addition the threshold applies per asset, so provided that all of the conditions are met, a business could deduct the full cost of multiple assets that cost less than $20,000 each.

The federal government announced on 14^th May 2024 that it would extend the instant asset write-off threshold to $20,000 for 1^st July 2024 to 30^th June 2025. However at the time of writing the extension was not yet law, so the instant asset write-off threshold is currently $1,000 unless the proposed legislation is passed. If passed we would expect the measure to be applied retrospectively from 1^st July 2024.

Contributed by Campbell Liggins.