Newsletter #108 Clarification

James Murphy Tax


Could you please explain what this means?

This is from bO2 newsletter issue #108.

  1. There is temporary full expensing for the purchase of capital assets between 6.10.2020 and 30.6.2022. If your business has a genuine need for new equipment, you could directly benefit from this. Business with aggregated annual turnover below the relevant threshold will be able to deduct the full cost eligible capital asset acquired from 7:30pm AEDT on 6.10.2020 and first used or installed by 30.6.2022.
  2. Full expensing in the year of first use will apply to new depreciable assets and the cost of improvements to existing eligible assets for businesses with aggregated annual turnover of less than $5 billion.

I own a small agricultural business with a turnover under $5 million.

The instant asset write-off for eligible business is $150,000 until Dec 2020 with the ATO.

Are the above 2 points referring to an instant write-off of assets that are directly connected to your source of income?


The confusion is understandable but there is no contradiction as such.

To clarify the $150k instant asset write-off was the latest form of this incentive announced in March 2020 in response to the Covid 19 pandemic.

In the October 2020 Federal Budget the “temporary full expensing incentive” (outlined above) was announced with the aim of further stimulating the economy.

This should be viewed as an enhancement of the instant asset write-off which still exists.

Note second-hand assets are eligible if the turnover is less than $50 million.