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BUSINESS TAXATION –
INSTANT ASSET WRITE OFF
Instant asset write-off extended to more taxpayers; threshold increased.
The Government is increasing the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
The threshold increase will apply from 12th March 2020 to 30th June 2020.
The higher IAWO threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.
The IAWO is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.
The Government is expanding access so that more businesses can take advantage of the IAWO. The annual turnover threshold for businesses is increasing from $50 million to $500 million. This proposal applies from announcement until 30 June 2020, for new or second-hand assets first used or installed ready for use in this time frame.
BACKING BUSINESS INVESTMENT
The Government is introducing a time limited 15 month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.
The key features of the incentive are:
• Deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost;
• Businesses with aggregated turnover below $500 million; and
• New assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (i.e. plant, equipment and specified intangible assets, such as patents) acquired after announcement and first used or installed by 30 June 2021. Does not apply to second-hand. Division 40 assets, or buildings and other capital works depreciable under Division 43.
Businesses with aggregated turnover below $500 million are eligible, purchasing certain new depreciable assets. Applies to eligible assets acquired after announcement and first used or installed by 30 June 2021.
The threshold increase will apply from 12th March 2020 to 30th June 2020.
The higher IAWO threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.
The IAWO is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.
The Government is expanding access so that more businesses can take advantage of the IAWO. The annual turnover threshold for businesses is increasing from $50 million to $500 million. This proposal applies from announcement until 30 June 2020, for new or second-hand assets first used or installed ready for use in this time frame.
BACKING BUSINESS INVESTMENT
The Government is introducing a time limited 15 month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.
The key features of the incentive are:
• Deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost;
• Businesses with aggregated turnover below $500 million; and
• New assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (i.e. plant, equipment and specified intangible assets, such as patents) acquired after announcement and first used or installed by 30 June 2021. Does not apply to second-hand. Division 40 assets, or buildings and other capital works depreciable under Division 43.
Businesses with aggregated turnover below $500 million are eligible, purchasing certain new depreciable assets. Applies to eligible assets acquired after announcement and first used or installed by 30 June 2021.
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Important: This is not advice. Clients should not act solely on the basis of the material contained within this bulletin. We recommend formal advice be sought by clients before acting in any of these areas.
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