The recent budget lead to the extension of the instant asset write off (also known as temporary full expensing) until 30th of June 2023. Here are some things you should be aware of when thinking about purchasing a new asset:
- There are limits for the amount you can claim when you purchase a car – the ATO imposes a car limit for regular passenger vehicles when you purchase them for a business. Each year this limit is indexed, meaning it will slowly increase or decrease over time. Currently, the car limit is $60,733 inclusive of GST. So you can’t purchase a luxury car thinking you’ll be able to claim the full amount. If the car is designed to carry a load larger than one tonne, or more than 9 passengers, the car limit does not apply.
- There are other exceptions to the instant asset write off – specific assets are not allowed to be written off fully under the instant asset rules. The main ones are capital works and assets that are leased. The full list is here.
- The sky is the limit! – If the asset you are purchasing is not an excluded asset, there is no limit on the amount you can write off on an asset. You just have to have it purchased and ready for use before the 30th of June 2023.
The instant asset write off is a crucial element of tax planning. If you believe you can utilise this to the best advantage of your business, please get in touch with us and we will be happy to assess the benefits of purchasing a new asset. Contact us here for further information.