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$30,000 Instant Asset Write-Off

$30,000 Instant Asset Write-Off

Make sure you get your orders in for delivery by the 30th of June 2019 to maximise the Government’s $30,000 Instant Asset Write-Off.

And remember this deduction is available for multiple assets as long as they are under $30,000.

We can help with Finance if you are ready to go shopping. Or get pre-approval on a “no obligation” basis to ensure you’re ready to take advantage of the “specials” on offer in the lead up to the End Of Fiscal Year 2019.

In the 2019-2020 Budget Announcement, the Federal Government proposed to increase the instant asset write-off threshold from $20,000 to $30,000 for eligible assets. They also sought to expand the application of the instant asset write-off to apply to both small and medium-sized businesses with an aggregated annual turnover of less than $50 million.

This proposal has now been passed as law and applies to all eligible assets first used, or installed ready for use, from 3 April 2019 to 30 June 2020.

For more details on the asset write-off please check with your accountant.

The ATO website has some good examples to explain the details as well: Instant asset write-off thresholds. “

ATO Examples for the $30,000 Instant Asset Write-Off

Asset purchased before a change in threshold

Leslie is a florist and her business required a new van to help expand her deliveries.

Leslie purchased a van for $22,500, which was paid for on 23 January 2019. Under the terms of the contract, delivery for the van was on 30 January 2019.

The van was not ready for use until after the 29 January 2019 when the threshold increased to $25,000. Leslie is able to claim the entire cost of the van as part of the instant asset write-off in her 2019 income tax return.

If the van had been delivered before 29 January 2019 and she started to use it at the time of delivery, Leslie would not have been able to immediately write-off the van.

Purchasing multiple assets

Barry owns a plumbing business. On 10 April 2019, Barry purchases and starts to use a new van for his business valued at $22,000.

The following month he purchases and starts to use a trailer to support his business which costs him $14,000. Barry has spent a total of $36,000.

As the $30,000 instant asset write-off threshold applies to each asset, Barry is able to claim both the van and the trailer in his 2019 tax return.

Exceeding the threshold

Daryl owns an electrical business, Daryl’s Electrical, which qualifies as a small business. The business purchases a ute for $40,000 on 28 July 2017. Daryl estimates the ute will be used 40% of the time for his business.

Even though the value of the ute to the business is $16,000 ($40,000 × 40%), Daryl can’t immediately write it off. Instead, he adds the $16,000 for the ute to Daryl’s Electrical small business pool.

Immediate write-off

On 18 May 2018, Fiona buys a new powerful computer for $6,800 that she uses 80% of the time for business purposes and 20% of the time for personal purposes.

She also bought a new printer for $700 which she uses for 100% of the time for business purposes.

For the computer, Fiona calculates her instant asset write-off as 80% (the business use proportion) of $6,800, so she claims $5,440. For the printer, she claims the entire cost of $700.

Whilst we specialise in Equipment and Business Finance, we also have an in-depth knowledge of many industries and the issues affecting businesses who operate within them.

This knowledge and know-how allows us to source and deliver finance solutions quickly and with terms best suited to your own individual requirements.

And with access to a large pool of lenders, full and low doc options and a genuine desire to help our clients, we’ll go the extra step to help you achieve your goals.

Ready to go shopping? Call now to discuss – 02 9453 0300.