Instant asset stimulus package for 2020 purchases
The instant asset write-off will be available for the majority of businesses during some part of the 2019/20 income year
Between 12 March 2020 to 30 June 2020, businesses with up to $500m in turnover will get an instant asset write-off for assets first installed and ready for use under $150k.
In the legislation, the update also extends to the low-value pool. Where a small business pool has a closing balance of less than $150k will be able to write off the entire balance (also up from $30k).
The Government stimulus package, announced to prevent a large national economic downturn, includes this boost to instant asset write-offs. However, the stimulus will not be received until lodgement of the tax return.
The instant asset write-off currently will be extended to include the vast majority of businesses in Australia. As a result of the Coronavirus pandemic, the government has announced that businesses with less then $500m in turnover will have access to an immediate write-off for an asset under the following conditions:
- purchased and installed ready for use between 12 March 2020 and 30 June 2020, and
- costing less than $150k.
This is up from $30k which was currently available to businesses with less than $50m in turnover.
Instant asset write-off tables – based on entity’s turnover
|
Assessable income $10m and under |
|
|
Timeframe |
Instant asset write-off limit |
|
12 May 2015 to 28 January 2019 |
$20,000 |
|
29 January 2019 to 2 April 2019 7:30pm (AEDT) |
$25,000 |
|
2 April 2019 7:30pm (AEDT) to 11 March 2020 |
$30,000 |
|
12 March 2020 to 30 June 2020 |
$150,000 |
|
From 1 July 2020 |
$1,000 |
|
Assessable income between $10m and $50m |
|
|
Timeframe |
Instant asset write-off/Low value pool limit |
|
Prior to 2 April 2019 |
$1,000 |
|
2 April 2019 7:30pm (AEDT) to 11 March 2020 |
$30,000 |
|
12 March 2020 to 30 June 2020 |
$150,000 |
|
From 1 July 2020 (reverts to low value pool) |
$1,000 |
|
Assessable income between $50m and $500m |
|
|
Timeframe |
Instant asset write-off/Low value pool limit |
|
Prior to 12 March 2020 |
$1,000 |
|
12 March 2020 to 30 June 2020 |
$150,000 |
|
From 1 July 2020 (reverts to low value pool) |
$1,000 |
Small business depreciation pools
This change also applies to the general write-off of the entire balance of a general small business deprecation pool.
However, the entity needs to be utilising Div 328, ie the small business depreciation pools.
For the 2019/20 income year, the pool can be written off if the closing balance is less than $150,000.