The $20,000 temporary instant asset write-off is extended to businesses with an aggregated annual turnover of less than $10 million.
The write-off can provide businesses with some cash benefit. For example, a business with an effective tax rate of 30% can receive up to $5,999 as a tax refund if an asset costing less than $20,000 is purchased.
Cars are a big ticket item so it’s timely to revisit which models are eligible.
Am I eligible?
To recap, in order to be eligible for the temporary instant asset write-off, the following conditions need to be satisfied:
- The taxpayers must be a small business entity – note that it is now available for businesses with an aggregated annual turnover of less than $10 million
- The asset must be a “depreciating asset” (as defined under tax law)
- The asset must be first used or installed ready for use by 30 June 2017, and
- The deduction only for “taxable purpose proportion” of an asset which cost under $20,000.
Other considerations also include:
- The cost of the depreciating asset will be reduced by the input tax credits which could be claimed for GST purposes
- Second hand assets are eligible, and
- Certain assets are excluded (eg. capital works, primary production, assets allocated to a low-value pool)