What is the Instant Asset Write Off (IAWO)?
- The IAWO is a once-off tax deduction that businesses can claim for the purchase of business-related assets
- Businesses can claim a 100% deduction for eligible assets. The asset is eligible even when it has been acquired under finance
- The current threshold is $150,000 for each asset. This means that businesses can immediately write off multiple assets
Does your business qualify?
Your business’ aggregated turnover must be under $500 million.
Aggregated turnover – Your business’ annual turnover plus the annual turnover of any businesses or entities that are connected or affiliated with your business, whether they are based on Australia or overseas.
What assets are eligible under the IAWO?
- The assets must be used for business purposes
- Both new and used assets are eligible. However, the assets must be installed/in use by 31 December 2020
- As long as the cost of each asset does not exceed $150,000 in value, the deductions can be claimed on multiple assets
For a list of excluded assets, please refer to the Australian Taxation Office website – excluded assets.
What if the equipment costs more than $150,000?
If the equipment is valued at more than $150,000, you speak to your Accountant or Tax Advisor. There may an option to use the new 15 months investment incentive which provides you with a 50% deduction of the cost of the new assets. For more information on the depreciation rules and capital allowances, please refer to the ATO website.
Your business has 90 days to take advantage of the IAWO
Starting 1 January 2021, the threshold for assets will revert to $1,000 for small businesses that have an annual turnover of less than $10 million. Do not miss out on this great tax deduction opportunity. Speak to your Pacific Finance Broker today for more information by giving us a call on (08) 9321 2120 or by sending us an email at info@pacificfinance.com.au