As an update to a blog post on 5th June 2020, the instant asset write-off program has been extended until 31st December 2020. That is, businesses will be able to claim accelerated depreciation up to $150,000 until 31st December 2020.

Under instant asset write-off eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use. To encourage capital investment during the current period, the write-off threshold has increased from $30,000 to $150,000 for purchase / first use up until 31st December 2020.


Eligibility to claim the increased threshold, instant asset write-off depends on:

  • Annual turnover of less than $500 million
  • The date you purchased the asset
  • Asset is used or installed ready for use between 12th March 2020 and 31st December 2020
  • The cost of the asset being less than the threshold

Instant asset write-off can be used for:

  • Multiple assets if the cost of each individual asset is less than the relevant threshold
  • New and second-hand assets

If business owners purchase multiple assets for business use, they can group assets together in order to meet the $150,000 threshold.

Note that for eligible businesses with an aggregated turnover between $10 million and $500 million, the $150,000 threshold applies for assets purchased from 2nd April 2019 (7.30pm AEDT) but not first used or installed ready for use until 12th March 2020 to 31st December 2020.

At this stage, from 1st January 2021 the instant asset write-off will only be available for small businesses with a turnover of less than $10 million, and the threshold will be $1,000.


A small number of assets are excluded from this increased write off opportunity, including:

  • Assets leased out for more than 50% of the time on a depreciating asset lease
  • Assets allocated to low-value assets before using the simplified depreciation rules
  • Horticultural plants including grapevines
  • Software allocated to a software development pool
  • Capital works – used to produce income, including buildings and structural improvements, written off over a longer period than other depreciating assets

Business and Personal Use of Asset

For applicable assets, business owners must estimate the percentage split between business and personal use. For example, if a business owner purchases a new computer and estimates it is used 80% of the time for business and 20% for personal use, the business owner may only claim 80% of the assets value as a deduction.

If the asset is 100% business use, then the business may claim the full value of the asset.

Later Sale or Disposal of Asset

If you use the instant asset write-off for an asset and then sell or dispose of that asset, you need to include the taxable purpose portion of the amount you received for the asset in your assessable income for the year.

Motor Vehicles

Motor vehicles are subject to a ‘car cost limit’, meaning there is a limit on what you can actually claim back.

For cars designed to carry a load less than one tonne and fewer than nine passengers, the total amount allowed to claim is $57,581. However, for vehicles up to $150,000 that can carry more than one tonne or more than nine passengers, you can claim the full purchase price.

For example, if a business owner purchased a passenger car for $140,000, and the car is used 90% for business and 10% for personal use, then the total deduction would be 90% of $57,581. Meanwhile, if a business owner purchased a one-tonne ute for $140,000, they can claim the entire purchase price.

Business owners are required to keep a logbook to track what the car is being used for and also be mindful of the luxury car tax associated with certain vehicles.

How to Apply

There is no application required. The instant asset write-off is applied via the lodgement of your tax return in the applicable financial year.


The increased instant asset write-off is a great opportunity for businesses to receive a tax break and utilise an asset to help increase revenue or increase efficiencies within your business. ABJ Solutions highly recommends taking advantage of the instant asset write-off.

Let Us Help

If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary 30 minute Zoom meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through these challenging times.