The instant asset write-off explained
- Applies to depreciating assets from 12 March 2020 for all businesses with an annual aggregated turnover of up to $500 million
- Immediate tax deduction for the cost of a depreciating asset, whether new or second-hand, which has a cost of less than $150,000 Excl GST (cost includes stamp duty, delivery costs and accessories fitted at time of delivery but excludes rego and insurance)
- The Tax office has set a maximum depreciation limit on a motor vehicle “designed mainly to carry passengers” of $57,581 Excl GST, therefore the limit on cars designed mainly to carry passengers is $57,581 not $150,000.
For example - if a business purchases a new or used vehicle which is predominately designed to carry passengers, it may be eligible for 100% write-off as long as the purchase price is below or equal to $57,581 Excl. GST.
- Commercial vehicles above 1 tonne carrying capacity like commercial utes may fall outside of the criteria "designed mainly to carry passengers" i.e. they are used for business purposes, they have a tray and are predominately used to carry a load etc. In this circumstance, you may be eligible for a 100% write-off up to $150,000.
- Ends 31 December 2020
It is important to note that these examples are provided for explanatory purposes only and this communication should not be used as tax advice. You should first speak with your accountant to see how this stimulus package applies to your business.