Don’t forget about the write-off concession of assets below $20,000

Don’t forget about the write-off concession of assets below $20,000

Current as of January 2016

This measure was introduced as part of the Federal Budget on 12 May 2015 and continues until 30 June 2017.

The conditions that need to be met to access the concession are as follows:

  • Assets must have been first acquired for use in your business after the start date to be eligible.
  • You can access the concession if you are a small business entity or sole trader (where your annual aggregated turnover is less than $2 million).
  • You can claim an immediate deduction for each eligible asset (new or second hand) in the year that the asset is first used or installed ready for use in your business.
  • If your business is GST-registered, the write-off threshold is the GST-exclusive cost of the asset $22 000 (including GST). If your business is not GST registered, the threshold is GST-inclusive $20 000, (including GST).
  • The concession is applied on an asset-by-asset basis, even where the assets purchased are identical or form part of a set. Your supporting documentation needs to separately itemise each asset.
  • The cost threshold is not affected by any trade in, your relevant private use portion or by any FBT effect.
  • In general terms where a general small business pool value falls below $20,000 during the concession period, it can be written off.

The concession

  • Only accelerates the timing of a deduction you would have eventually got anyway (over the asset’s effective life).
  • The increased write-off provides a cash flow benefit by bringing forward your deductions.
  • You should apply normal commercial logic when considering any asset acquisition, notwithstanding you get a full tax deduction for it.

If you have any queries please contact our office.

This newsletter has been produced by Stanley & Williamson as a service to its clients and associates. The information contained in the newsletter is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this newsletter, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under Professional Standards legislation. 

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