Instant asset write-off
Write-off extended for small business
A 12 month extension to the $20,000 instant asset write-off (due to end on 30 June 2025) has been announced in the 2024 Federal budget, with an aim to improve cash flows and reduce compliance costs for small businesses.
As part of the 2024 Federal Budget, the Federal government has announced a one year extension to the increase in the instant asset write-off threshold to $20,000.
With the temporary threshold increase announced (yet to be legislated) in the 2023 Federal budget due to expire on 30 June 2024, this extension means small businesses can immediately deduct the cost of eligible assets in their 2024-25 income tax return.
Eligibility criteria
The following conditions must be satisfied in order to be eligible for the instant asset write-off:
The asset must be first 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 will apply on a per asset basis, so small businesses can instantly write off multiple assets.
Assets valued over the threshold
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to 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 the approach from the previous income year and immediately deduct assets eligible for the instant asset write off.
The provisions that prevent small businesses from re-entering the simplified depreciation regime (lockout rules) for five years if they opt-out will continue to be suspended until 30 June 2025.
Please free to contact our office should you have any queries in relation to these announcements.
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