Extending the instant asset write-off

The bill also includes the extension of the $150,000 instant asset write-off threshold for a further six months until 31 December 2020, as announced by the government last week.

The extension will allow businesses with an aggregated turnover of less than $500 million to claim an immediate deduction for depreciating assets that cost less than $150,000 and are first used or installed ready for use for a taxable purpose on or after 12 March 2020 and by 31 December 2020.

In addition, the bill also extends the temporary suspension of the five-year lock-out rules which can apply when a small-business entity chooses not to use the simplified depreciation rules. The suspension of these rules will be extended to 30 June 2021.

“Modifications will also be made to the rules for entities that have a substituted accounting period to improve access to the higher instant asset write-off thresholds. The way these rules are currently drafted has meant that entities with a year-end other than 30 June have not had the same level of access to the rules as entities using a standard 30 June year-end date,” Mr Carruthers said.

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