Temporary Full Expensing Ends 30 June 2023

Instant Asset Write-off Threshold to Apply From 1 July 2023

The current instant asset write-off known as “temporary full expensing” that allowed businesses with an aggregated turnover of less than $5 billion p.a. to claim 100% of the cost of an asset in the year that it was purchased will end on 30 June 2023.

Temporary Full Expensing Ends 30 June 2023

Instant asset write-off can currently be applied to the cost of new and, where aggregated turnover is less than $50 million, second-hand assets. Generally, no cost cap or threshold limit applies to this concession so the asset may be of any value. The one main exemption to this is the car cost limit that applies to the cost of passenger vehicles (except a motorcycle or similar vehicle) designed to carry a load less than one tonne and fewer than 9 passengers that have not been modified for use by people with disability. The car cost limit for the 2022-23 tax year is $64,741.

Currently to claim the full immediate write-off, assets need to be delivered and installed by 30 June 2023.

After 30 June 2023, and as stated in the 2023 budget (which is not yet law), small businesses with an aggregated annual turnover less than $10 million may choose to claim depreciation under simplified depreciation rules and claim an immediate write-off for depreciating assets costing less than $20,000 that are first used or installed between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write-off multiple low-cost assets.

How can we help?

This may be the last opportunity to take advantage of the higher instant asset write off provisions under the current concessions ending 30 Jun 2023.

If you like to discuss how this concession may be able to be included into your end of year tax planning, please contact our office.