$150,000 Instant Asset Write-off Extended
- Jun 08, 2020
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After expanding the scheme from covering assets with a cost of less than $30,000 to a cost of less than $150,000 and extending access to the scheme to include medium sized businesses in response to the COVID-19 pandemic, the Federal Government has announced that it plans to extend the deadline for accessing the scheme from 30 June 2020 to December 31 2020.
The Treasurer, Josh Frydenberg, said the extended timeframe would help firms to invest in assets to support their business as the economy reopens and coronavirus health restrictions continue to be eased.
The instant asset write-off scheme allows small and medium-sized businesses to bring forward tax deductions on eligible asset purchases.
Businesses with a turnover of up to $500 million per year will be able to claim an immediate tax deduction on certain asset purchases that cost less than $150,000.
Instant asset write-off can be accessed for the acquisition of:
•Multiple assets as long as the cost of each individual asset is less than the relevant threshold; and
•New and second-hand assets.
•The deduction available under the instant asset write-off can be limited in circumstances. For example:A car limit applies to passenger vehicles. The limit is $57,581 for the 2019-20 income tax year and $59,136 for the 2020-21 income tax year.
If the asset is used for business and private use, you can only claim the business portion.
Businesses intending to claim the deduction in their June 2020 tax return, must purchase and install the asset/assets, ready for use, before 30 June 2020. For assets purchased or installed after 30 June 2020, but before 31 December 2020, business will be able to claim the tax deduction in their tax returns for the year ending 30 June 2021.
Please note that legislative changes will still need to be made to give effect to this measure.
The Treasurer’s media release can be found here.
For more information, please contact the PrincipleFocus office.
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