2020 Budget Instant Asset Write Off Tax incentives – Plain Speak Summary Table & Notes

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Mark

Below is a PLAIN SPEAK table & summary of the Instant Asset Write Off tax incentives announced in the Federal Government’s 2020 Budget on 6th October 2020.


Instant Asset Write Off Incentives available for businesses based on annual turnover

  • The Government will support businesses by enabling them to deduct the full cost of eligible capital assets acquired from 7:30pm AEDT on 6 October 2020 (Budget night) and first used or installed by 30 June 2022.

 

  • Full expensing in the year of first use will apply to new depreciable assets and the cost of improvements to existing eligible assets. For SMEs (with turnover < $50m pa), full expensing also applies to second-hand assets.

 

  • Businesses (turnover $50 – $500m pa) can still deduct 100% of eligible second-hand assets costing < $150K ex GST that are purchased by 31 December 2020 and first used or installed by 30 June 2021.

 

  • Small businesses (turnover < $10m pa) can deduct the balance of their simplified depreciation pool at the end of 2021 and/or 2022. The provisions which prevent small businesses from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended.

 

 

 

If you would like to know more, the Government Fact sheet link here has excellent explanation with examples (see pages 9-12) https://budget.gov.au/2020-21/content/factsheets/download/tax_fact-sheet.pdf

 

 

Mark O’Donoghue, Founder & CEO Finlease

Finlease home page

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