Fortunity Chartered Accountants and Financial Planners

Instant Asset Write-Off

INSTANT ASSET WRITE-OFF ENDING SOON

The Small Business Instant Asset Write-Off

Originally announced in the 2015 Federal Budget, small business can immediately deduct assets costing less than $20,000 in the income year in which it is first used.

 Applies to all small businesses with aggregate annual turnover less than $2 million

  • Applies on a per asset basis, so several assets each costing less than $20,000 would qualify
  • Applies to new and second hand assets
  • Applies to assets like cars, vans, kitchens, machinery and other plant & equipment
  • A small number of exclusions apply, including horticultural plants, capital works, software, primary production assets and assets leased out to another party.

Things to consider

When a business purchases a depreciable asset, tax law traditionally allows for the tax deduction to be spread over the life of the asset.  The Small Business Instant Asset Write-off allows businesses to receive an immediate tax deduction for the purchase, bringing forward the cash benefit of the tax deduction by many years.

If your business has plans to purchase any depreciable assets, or update fixtures and fittings (such as kitchens, office spaces etc) within the business, it may benefit you to undertake these purchases prior to the 30th June 2017.

As always, businesses should ensure there are good commercial reasons to purchase the asset and not simply to gain a tax deduction. Cashflow considerations are also important for the upfront purchase of any asset.

How we can help

If you are considering purchasing one or more depreciable assets, we can help you make the most of the tax benefits as well as talk through the cashflow considerations for your business.  We can ensure that you are taking advantage of any other tax and other government incentives available for your industry.  If you have any questions on the Small Business Instant Asset Write-off or any other tax planning concerns, please call the team on 02 4304 8888 or go to our Contact us page.

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