New legislation moving through the Australian Senate will increase the instant asset write-off threshold to $20,000. This change aligns with the 2023–24 income year, providing consistency for small businesses in understanding which new assets can be immediately deducted.
Eligibility Criteria
To be eligible for the instant asset write-off, the following conditions must be met:
- The asset must be installed or ready to use between 1 July 2024 and 30 June 2025.
- The asset must cost less than $20,000.
- The annual aggregated turnover of the business must be less than $10 million.
The $20,000 threshold applies on a per-asset basis, allowing multiple assets to be written off instantly if each asset costs under $20,000.
Assets Over the Threshold
Assets valued at $20,000 or more cannot be immediately deducted. Instead, they can be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
Next Steps
Small businesses can continue to immediately deduct eligible assets using the instant asset write-off. This amendment is intended to improve cash flow compared to deducting assets in the small business depreciation pool and reduce record-keeping over time.
The provisions preventing small businesses from re-entering the simplified depreciation regime (lockout rules) for five years if they opt out will remain suspended until 30 June 2025.
Please contact our office if you have any queries regarding these announcements.
