Instant asset write-off for eligible businesses allows small business owners to immediately write off the business portion of the cost of an asset that costs less than the relevant limit amount for the year the asset is first used or installed ready for use.
About the instant asset write-off
Eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.
The instant asset write-off (IAWO) can be used for:
- multiple assets, if the cost of each individual asset is less than the relevant limit
- new and second-hand assets.
If you are a small business, you need to apply the simplified depreciation rules to claim the IAWO. The write-off can't be used for assets that are excluded from those rules.
A small business that has claimed an immediate deduction for an asset under the simplified depreciation rules in a prior income year can also immediately deduct an amount included in the second element (cost addition) of that asset's cost, where the amount is both:
- the first deductible amount of the second element cost incurred after the end of the income year in which the asset was written off
- less than the relevant limit amount for the income year it is being claimed.
Eligibility
The instant asset write-off eligibility criteria and limit have changed over time. You need to:
- check your business's eligibility against the conditions below
- apply the relevant limit amount.
The income year in which you may claim an instant asset write-off depends on when the asset was purchased, first used or installed ready for use.
Eligibility conditions
Eligibility, and the year in which you may use the instant asset write-off to claim an immediate deduction for an asset depends on:
- your aggregated turnover – this is the annual turnover of your business and that of any business entities that are your affiliates or connected with you
- the date you purchased the asset
- when it was first used or installed ready for use
- the cost of the asset being less than the limit.
Disclaimer: This does not purport to be comprehensive or to render legal advice. You should not act based on any information contained in this publication without first obtaining specific professional advice. Consult your legal advisor to determine if this applies to you.
