- Using the: simplified depreciation rules, assets costing less than the relevant instant asset write-off threshold are written off in the year they are first used, or installed ready-for-use.
- This threshold applies to each asset irrespective of whether the asset is purchased new or second-hand.
- Motor vehicles are included.
- However, for Motor vehicles OVER the thresholds, this article no longer applies + you will have to depreciate it normally & consider the car cost limit. See QC 21100 Last modified 19 Jun 2019
- For the figures below,
- If you are registered for GST, figures below are GST excluded / net gst
- If you ARE NOT registered for GST, figures below are GST inclusive
- If you buy an asset and it costs less than $20,000 (net gst. Including GST will be $22,000), you can immediately deduct the business portion in your tax return.
- The $20,000 threshold applied from 12 May 2015 and will reduce to $1,000 from 1 July 2018.
- You are eligible to use simplified depreciation rules and claim the immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:
- you have a turnover less than $10 million (increased from $2 million on 1 July 2016), and
- the asset was first used or installed ready for use in the income year you are claiming it in.
- Assets that cost $20,000 or more can't be immediately deducted. They will continue to be deducted over time using the general small business pool. You write-off the balance of this pool if the balance (before applying any other depreciation deduction) is less than $20,000 at the end of an income year.