The Australian Federal Government has recently introduced a change to the existing Instant Asset Write-Off benefit. This change is directed towards eligible Australian businesses to assist with their growth plans while they operate during this time of uncertainty. 

Updated 12 May 2020

What is the Instant Asset Write Off?

 

According to the Australian Taxation Office (ATO), the Instant Asset Write Off can assist eligible businesses by:

  • immediately writing off the cost of each new and/or second-hand asset that costs less than the threshold
  • claiming a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use. The asset can be new and/or second-hand.

Some exclusions and limits apply.

You can check your business eligibility on the ATO website.

 

What is the update to the Instant Asset Write Off benefit?

 

The Instant Tax Write-Off benefit has recently been updated for some Australian businesses. Your claim may be eligible for one of two benefits below:
  • [Option A] The asset is delivered by 30 June 2020 – Instant asset write-off raised from $30,000 to $150,000 
  • [Option B] The asset is delivered by 30 June 2021- Businesses to claim 50% of depreciation costs (no maximum threshold)

Can you apply for this Instant Tax Write-Off benefit against business solar power systems?

Yes, if eligible you can apply for this benefit against the purchase of a solar power system for your business. 

What is a tax discount example for each benefit?

A tax example for a $100,000 cap-ex solution for each benefit period is stated below:

  • [Option A] The asset is delivered by 30 June 2020 – Instant asset write-off raised from $30,000 to $150,000.
     $27,500 tax saving
  • [Option B] The asset is delivered by 30 June 2021- Businesses to claim 50% of depreciation costs (no maximum threshold)
    $13,750 tax saving

Some of this article has been extracted from the Choice Energy website. Read the full post here.

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