On Tuesday, 6 October 2020 further changes were made to the Instant Asset Write Off (IAWO) Scheme. These changes make it easier for Australian businesses to write-off the full value of assets purchased without any limitations on the value of the asset.
What you need to know about the new IAWO Scheme
- The original $150,000 cap for each asset has been removed. So, there is currently no limitation on the value of newly purchased assets.
- Previously only businesses with an aggregated turnover of less than $500 million were eligible. Now businesses with an aggregated turnover of up to $5 billion can apply under the new scheme.
- Depreciable assets that are acquired after 7:30 pm (AWST) 6 October 2020 are eligible as long as the assets are first installed or in use by 30 June 2022.
- The new scheme will be in effect until 30 June 2022. This gives businesses more time to upgrade their equipment and claim the relevant deductions.
- Businesses that are purchasing second-hand equipment must have an aggregated turnover under $50 million. *
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 in Australia or overseas.
Purchasing used/second-hand assets via the IAWO Scheme
- Businesses with an aggregated turnover under $50 million can claim a full deduction for second-hand assets, with no limitation on the value of the asset.
- Businesses with aggregated turnovers between $50 million to $500 million can claim a full deduction for second-hand assets up to the value of $150,000 per asset. However, it should be noted that the purchase of said asset must occur prior to 31 December 2020.
- Businesses with an aggregated turnover above $500 million cannot claim any deductions for second-hand assets.
If you require further information on the changes to the Instant Asset Write Off (IAWO) Scheme, please contact your Pacific Finance Broker on (08) 9321 2120 or send us an email via email@example.com