Under instant asset write-off eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use.

Instant asset write-off can be used for:

  • multiple assets as long as the cost of each individual asset is less than the relevant threshold
  • new and second-hand assets.

It cannot be used for assets that are excluded from the simplified depreciation rules.

The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount depending on when the asset was purchased, first used or installed ready for use.

Changes from 12 March 2020

From 12 March 2020 until 30 June 2020 the instant asset write-off:

  • threshold amount for each asset is $150,000 (up from $30,000)
  • eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

Eligibility to use instant asset write-off on an asset depends on:

  • your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
  • the date you purchased the asset
  • when it was first used or installed ready for use
  • the cost of the asset being less than the threshold.

If you run a small business and choose to use the simplified depreciation rules, you must use instant asset write-off on all eligible assets.

Businesses with an aggregated turnover of $500 million or more are not eligible to use instant asset write-off.

From 1 July 2020 the instant asset write-off will only be available for small businesses with an aggregated turnover of less than $10 million and the threshold will be $1,000.

Thresholds

The thresholds have changed over the last few years and are as follows:

Instant asset write-off thresholds
Eligible businesses Date range for when asset first used or installed ready for use Threshold
Less than $500 million aggregated turnover 12 March 2020 to 30 June 2020 (see note)

$150,000

Less than $50 million aggregated turnover 7.30pm (AEDT) on 2 April 2019 to 11 March 2020

$30,000

Less than $10 million aggregated turnover 29 January 2019 to 7.30pm (AEDT) on 2 April 2019

$25,000

Less than $10 million aggregated turnover 1 July 2016 to 28 January 2019

$20,000

Less than $2 million aggregated turnover 7.30pm (AEST) on 12 May 2015 to 30 June 2016

$20,000

Less than $2 million aggregated turnover 1 January 2014 to prior to 7.30pm (AEST) 12 May 2015

$1,000

Less than $2 million aggregated turnover 1 July 2012 to 31 December 2013

$6,500

Less than $2 million aggregated turnover 1 July 2011 to 30 June 2012

$1,000

Make sure you have checked the eligibility criteria for your business.

Note: For eligible businesses with an aggregated turnover from $10 million to less than $500 million, the $150,000 threshold applies for assets purchased from 7.30pm (AEDT) on 2 April 2019 but not first used or installed ready for use until 12 March 2020 to 30 June 2020.

Exclusions and limits

There are a small number of assets that are excluded.

In addition, if you purchase a car (a passenger vehicle, except a motor cycle or similar vehicle, designed to carry a load less than one tonne and fewer than nine passengers) for your business, the instant asset write-off is limited to the business portion of the car limit of $57,581 for the 2019–20 income tax year. For example, if you use your vehicle for 75% business use, the total you can claim under the instant asset write-off is 75% of $57,581, which equals $43,186.

You cannot claim the excess cost of the car under any other depreciation rules.