The instant asset write-off currently in ITAA 1997 Div 328 and 40 has been extended to include the vast majority of Australian businesses, in response to the COVID-19 pandemic. Amended legislation now permits businesses with less than $500m in aggregated turnover to an immediate write-off for an asset that:
• is purchased and installed ready for use between 12 March 2020 and 30 June 2021, and
• costs less than $150k.
Legislation was since amended even further with the introduction of the full expensing regime. A new CCH iQ event, based on the 2020 federal budget announcement and ensuing legislation, is located here. The new regime applies from 6 October 2020 (7:30pm AEDT).
Instant asset write-off tables – based on entity’s turnover
Aggregated turnover $10m and under
Timeframe (first used and first installed ready for use)
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 6 October 2020 7:30pm (AEDT)
$150,000
6 October 2020 7:30pm (AEDT) to 30 June 2022
No limit applies (full expensing regime)
Aggregated turnover 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 6 October 2020 7:30pm (AEDT) Note: Ready for use by 30 June 2021
$150,000
6 October 2020 7:30 (AEDT) to 30 June 2022
No limit applies (full expensing regime)
From 1 July 2022 (reverts to low value pool)
$1,000
Aggregated turnover between $50m and $500m
Timeframe
Instant asset write-off/Low value pool limit
Prior to 12 March 2020
$1,000
12 March 2020 to 6 October 2020 7:30pm (AEDT) Note: Ready for use by 30 June 2021
$150,000
6 October 2020 7:30pm (AEDT) to 30 June 2022
No limit applies (full expensing regime)
From 1 July 2022 (reverts to low value pool)
$1,000
Note: The full expensing regime noted above in the tables applies to businesses with aggregated turnover up to $5b, as announced in the 2020 federal budget.
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. In the 2020/21 and 2021/22 income years, the full balance of a small business depreciation pool may be written off in accordance with the full expensing regime.
