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, if the cost of each individual asset is less than the relevant threshold
• new and second-hand assets.

If you are a small business, you will need to apply the simplified depreciation rules in order to claim the instant asset write-off. It cannot be used for assets that are excluded from those 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.

Recent changes

For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:

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

From 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for:

• the business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test
• the business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million
• the balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.

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