Businesses can immediately deduct the cost of eligible new and second-hand* depreciating assets. The eligible new assets must be first held, and first used or installed ready for use for a taxable purpose, between 6 October 2020 and 30 June 2022.
Businesses with an aggregated turnover of less than $5 billion.
For businesses with an aggregated turnover of less than $50 million, temporary full expensing also applies to second-hand depreciating assets.
To be eligible for temporary full expensing, the depreciating asset must be:
- New or second-hand**
- First used or installed ready for use by you for a taxable purpose# between 7.30pm AEDT on 6 October 2020 and 30 June 2022.
Improvements to eligible assets and existing assets
As well as claiming an immediate deduction of the cost of an eligible asset, you can also claim an immediate deduction for the cost of any improvements to an eligible asset if they are incurred before 30 June 2022.
Existing assets are assets that would be eligible assets except that you held them before 7.30pm AEDT on 6 October 2020. You cannot claim the acquisition cost of existing assets under temporary full expensing. However, you can claim an immediate deduction for the cost of improvements incurred between 7.30pm AEDT on 6 October 2020 and 30 June 2022.
Assets purchased before 6 October 2020
Alternative depreciation rules apply.
For a simple explanation to the new depreciation of asset rules, please refer to the flowchart below. For any other questions specific to your circumstances, please contact one of our accountants to discuss.
Expensing / depreciation of assets for businesses under $50m turnover
Note: Additional exclusions apply to certain primary production assets.
* T&C’s apply
** if the asset is second-hand, your aggregated turnover is below $50 million
# such as a business purpose