A large part of the COVID stimulus packages announced by the Government last year was intended to encourage businesses to invest in capital assets. They did this by announcing the “temporary full expensing of depreciating assets” provisions on 6 October 2020 for businesses with aggregated turnover of less than $5 billion. Prior to this, the instant asset write-off threshold had been increased to $150,000 for businesses with aggregated turnover of less than $50 million.
These changes have resulted in many businesses investing in assets throughout this financial year with the view to claiming a full tax deduction for the asset. Alternatively, businesses may still be considering purchasing an asset prior to 30 June 2021 in order to claim the tax deduction. There are some tricks and opportunities to these depreciable asset write off provisions that you should be aware of.