Small business $20,000 instant asset write-off extended

The $20,000 instant asset write-off is being extended for another 12 months for businesses with an aggregated turnover of less than $10 million so that it will now expire on 30 June 2019.

The measure will improve cash flow for small businesses, providing a boost to small business activity and investment for another year.

The threshold amount was originally due to return to $1,000 on 1 July 2018. However, as a result of the Budget announcement, small businesses will be able to immediately deduct purchases of eligible depreciating assets costing less than $20,000 that are acquired between 1 July 2017 and 30 June 2019 and first used or installed ready for use by 30 June 2019 for a taxable purpose. Only a few assets are not eligible (such as horticultural plants and in-house software).

On 1 July 2019, the threshold will reduce to $1,000.

Note! Don’t forget that purchases will only qualify if they total $19,999.99 or less!

The $20,000 instant asset write-off explained

If you buy an asset to use for business purposes and it costs less than $20,000, you can immediately deduct the business portion of the cost in your tax return. This deduction is used for each asset that costs less than $20,000. You would then claim the deduction through your tax return in the year the asset was first used or installed ready for use.

It is important to note that the cost of an asset includes both the amount you paid for it and any additional amounts you spent on transporting and installing it.

What about assets valued at $20,000 or more?

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool (the pool) and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools).

The current ‘lock out’ laws for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for 5 years if they opt out) will continue to be suspended until 30 June 2019.


Contact Kelly+Partners

With a deep understanding of the links between our clients’ personal and professional lives, Kelly+Partners offers a coordinated solution across a range of financial services: accounting, tax, superannuation, wealth management, finance, estate planning assistance and family office services.

Please contact your local Kelly+Partners office to discuss how this article might impact you.


LEGAL NOTICE: General Advice Only. Liability limited by a scheme approved under professional standards legislation.

Each office of Kelly+Partners (Office) is a separate legal entity. Services are delivered independently by each Office. These Offices are not members of one national partnership or otherwise legal partners with each other, nor is any one Office responsible for the services or activities of any other.

Kelly Partners Group Holdings Limited (KPGH) is not responsible or liable for any acts or omissions of an Office and specifically disclaims any and all responsibility or liability for acts or omissions of an Office.