Extension and increase for instant asset write-off
Officially, the $30,000 instant asset write-off has been passed by both houses of parliament on 4 April 2019.
This means that from 7:30pm AEDT 2 April 2019 to 30 June 2020, assets purchased less than $30,000 will be entitled for an immediate write-off.
The instant asset write-off means that a small business can claim a complete deduction for assets costing less than the threshold. In the past, assets of this size needed to be written off over a number of years under depreciation rules.
There have been a number of changes for assets first used or installed ready for use during the 2018/19 income year.
The threshold for immediate deduction is as follows:
| Purchase date or date asset first used (or installed ready for use) for a taxable purpose | Threshold |
| 1 July 2018 to 28 January 2019 | $20,000 |
| 29 January 2019 to 2 April 2019 (7:30pm AEDT) | $25,000 |
| 2 April 2019 (7:30pm AEDT) to 30 June 2019 | $30,000 |
Significantly, an increase of the threshold to $30,000 may mean that your small business depreciation pool can be written off for the 2018/19 income year.
The entire balance of the pool will be available to be fully deducted in the 2018/19 income year if the pool balance before the calculation of depreciation is less than $30,000.
If you would like to go through the matter with us further, please do not hesitate to contact us.
Martin van der Saag
Partner
T: 02 9984 7774
E: martinv@northadvisory.com.au
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
The 2019 legislation significantly boosted the write-off threshold to AUD 30,000,
giving small businesses more flexibility to deduct the full cost of eligible assets immediately rather than depreciating over several years.
IAWO improves cash flow and reduces administrative burden — a major advantage for small businesses investing in equipment or tools.
By writing off the full cost in the purchase year, businesses can lower taxable income and enjoy near-term tax benefits.
The concession applies per asset — meaning careful planning can allow multiple write-offs in a single year.
This encourages businesses to make needed investments in batches, as long as each asset is under the cap.
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Frequently Asked Questions
What is the instant asset write-off (IAWO)?
The IAWO is a tax concession that allows eligible businesses to claim an immediate deduction — in the year the asset is first used or installed — for the business portion of the cost of certain depreciating assets, instead of depreciating them over several years.
Who is eligible to use the instant asset write-off?
Small businesses whose aggregated turnover is under the relevant threshold (commonly less than AUD 10 million or as specified by law) and that apply the simplified depreciation rules can use the IAWO.
What is the asset-cost limit under the 2019 extension?
Under the extension passed in April 2019, the threshold was raised to AUD 30,000 for assets first used or installed between 2 April 2019 (7:30pm AEDT) and 30 June 2020.
Can a business claim the write-off for more than one asset?
Yes — the threshold applies on a per-asset basis. Multiple assets can be written off in the same year, provided each individual asset costs less than the relevant limit.
What happens if an asset costs more than the threshold?
If an asset exceeds the threshold, it cannot be immediately written off under IAWO. Instead, it must be depreciated — typically by placing it into the small business depreciation pool and claiming a percentage deduction annually under standard depreciation rules.
What changed with the instant asset write-off extension and how does it help my business?
The instant asset write-off was extended and increased, allowing eligible businesses to immediately deduct the full cost of qualifying assets up to a higher threshold in the same year they’re purchased and used. This lets me reduce taxable income sooner, improve cash flow, and reinvest in my business sooner rather than depreciating assets over multiple years.
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