What is Temporary Full Expensing of Capital Assets?
Get Immediate Deduction’s until 30th June 2022
Are you aware of the temporary measure put in place by the Government which will allow businesses to claim an immediate deduction on the full cost of their eligible capital assets? Its called the “Temporary Full Expensing of Capital Assets” or the Covid incentive.
- If you purchase any eligible capital assets from 7.30pm AEDT on the 6 of October 2020 and have it first used or installed by 30 of June 2022, this is for you.
- Another bonus is that the current instant tax write-off (IAWO) has also been extended an extra 6 months giving businesses until the 30 of June 2021 to first use and install their assets.
Read more below to find how you can better understand how to keep your cash flow positive and benefit from this new measure.
- A business with an annual aggregated turnover of less than $5 billion will be entitled to an immediate tax deduction for the full cost of any new eligible capital assets and improvements to their existing eligible assets.
- A business with an annual aggregated turnover of less than $50 million will also be entitled to an immediate tax deduction for the full cost of their second-hand assets.
- A business with an aggregated annual turnover between $50 million and $500 million can claim an immediate deduction for the full cost of their eligible second-hand assets costing less than $150,000 if it was purchased by the 31 December 2020 and is installed ready for use by 30 June 2021.
- Small businesses with aggregated turnover of less than $10 million can deduct the balance of their simplified depreciation pool at the end of the income year under this new measure.
- The benefits apply to assets purchased between 7.30pm AEDT on 6 of October 2020 until 30 of June 2022.
- You have until June 2022 to buy and use or install your eligible assets.
- Current IAWO has been given an extra six months, until 30 of June 2021, to first use and install assets from its original date 31 December 2020.
How to apply
For further details of eligible assets and the new temporary full expensing of capital assets, simply visit the ATO website
These measures generously extend the current instant asset write-off concessions and put new measures in place which were introduced to help support businesses to recover from the impacts of COVID-19. This also means that you still have time to order and take delivery of a new Polymaster rainwater, chemical tank or diesel tank.
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