Extension of instant asset write-off bill introduced
The Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017 has been introduced into parliament.
The Bill amends the accelerated depreciation rules for small business entities (SBEs) to extend by 12 months (from 1 July 2017 to 30 June 2018) the availability of an immediate deduction for depreciating assets, amounts included in the second element of a depreciating asset’s cost and general small business pools, where the amount is less than $20,000 (rather than $1,000).
It should be noted that the small business aggregated annual threshold for 2016/17 and later income years is $10m. The Bill also extends the period for which the operation of the “lock-out” rule is suspended until 30 June 2018.
“The Bill amends the accelerated depreciation rules for small business entities to extend by 12 months … the availability of an immediate deduction for depreciating assets of less than $20,000.”
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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 Bill extends the instant asset write-off to 30 June 2018 for small businesses.
This continuation gives eligible businesses a further financial year to deduct assets immediately rather than progressively over their effective life
Assets costing less than $20,000 remain immediately deductible.
This threshold applies to qualifying depreciating assets first used or installed ready for use before the end of the extended period.
Extension relief applies only to small businesses with turnover up to $10 million.
The aggregated annual turnover test determines eligibility for the immediate deduction.
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Frequently Asked Questions
What is the purpose of the Instant Asset Write-off extension Bill?
The Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Bill 2017 was introduced to extend the temporary instant asset write-off scheme for another year — from 1 July 2017 to 30 June 2018 — allowing small businesses to immediately deduct eligible assets under $20,000.
Who can claim the extended instant asset write-off?
Small business entities with an aggregated annual turnover of up to $10 million are eligible to use the extended write-off for qualifying depreciating assets costing less than $20,000.
What qualifies as an “eligible asset”?
Eligible assets include depreciating assets used in the business (e.g. tools, equipment and machinery) with a cost less than $20,000. The asset must be first used or installed ready for use during the extended period (before 30 June 2018).
How does the extension alter the “lock-out” rule?
The Bill also extends the period for which the “lock-out” rule is suspended until 30 June 2018, meaning that under the extension period some assets can be written off immediately even if certain conditions would normally prevent it.
Why was this extension significant for small business planning?
The extension provided small businesses with certainty and cash-flow relief, encouraging them to invest in plant and equipment by enabling immediate deductions for qualifying purchases — rather than depreciating the cost over multiple years.
What types of costs could be immediately deducted under this extension?
The immediate deduction could apply to depreciating assets, including amounts in the second element
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