Legislation increasing the instant asset
write-off threshold from $1,000 to $20,000 for the 2024 income year passed
Parliament just 5 days prior to the end of the financial year.
Purchases of depreciable assets with a cost
of less than $20,000 that a small business makes between 1 July 2023 and 30
June 2024 can potentially be written-off in the year of purchase. It’s a major
cashflow advantage because the tax deduction can be taken in the year of
purchase instead of over a number of years.
To be eligible, the asset must be first
used, or installed ready for use, for a taxable purpose between 1 July 2023 and
30 June 2024. For example, you cannot simply have a receipt for an industrial
fridge, it must have been delivered and installed to be able to claim the
write-off in 2024.
The write-off threshold applies per asset,
so a small business entity can potentially deduct the full cost of multiple
assets across the 2024 year as long as the cost of each asset is less than
$20,000. A Bill to extend the instant asset write-off threshold increase to 30
June 2025 is currently before Parliament.
