Using the $20,000 instant asset write-off


Small businesses with a turnover of less than $10 million from 1 July 2016 can write-off assets costing less than $20,000 each up until 30 June 2018.

The simplified depreciation rules apply. Under these rules, you must immediately write-off most depreciating assets costing less than $20,000 that were bought and used, or installed ready for use from 7:30pm (AEST) on 12 May 2015 until 30 June 2018.

By pooling most other depreciating assets that cost $20,000 or more, you can claim a 15 per cent deduction in the year you buy them and a 30 per cent deduction each year after the first year.

Deduct the balance of your small business pool at the end of the income year if the balance at the time (before applying the depreciation deductions) is less than the instant asset write-off threshold ($20,000).

Remember, you can only claim a deduction for the portion of the asset used for business or other taxable uses – not the portion for private use.

When using the simplified depreciation rules, be mindful that you must use them to work out deductions for all your depreciating assets except those specifically excluded. Also, you must apply the entire set of rules, not just individual elements (such as the instant asset write-off).

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