Temporary Full Expensing of Depreciating Assets
New rules introduced will allow businesses with an aggregated turnover of less than $5 billion to deduct the full cost of eligible depreciable assets of any value in the year they are first held, and installed ready for use for a taxable purpose from 6 October 2020 to 30 June 2022.
For businesses with an aggregated turnover of less than $50 million, temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
Businesses will also be able to deduct the full cost of improvements to these assets and existing eligible depreciating assets made during this period.
To be eligible for temporary full expensing, the depreciating asset must be:
- new or second-hand (if it is a second-hand asset, your aggregated turnover must be below $50 million)
- first held by you at or after 7.30 pm AEDT on 6 October 2020
- first used or installed ready for use by you for a taxable purpose i.e., used for business between 7.30 pm AEDT on 6 October 2020 and 30 June 2022.
Please note, some exclusions apply.
Beware of long bank delays in finance approvals
To be able to claim the business asset in the 30 June 2021 financial year it will need to be installed and ready for use by 30 June 2021.
Currently, borrowers are facing long delays in having their finance applications approved. If you opt to use finance to purchase the business asset, we suggest arranging this now to ensure the 30 June 2021 deadline is met.
Get in touch
If you are unsure and want to know more, please do not hesitate to contact us.
Important: Liability limited by a scheme approved under Professional Standards Legislation. This is not advice.
General advice warning
The information contained in this document is general advice, which means that it has been prepared without taking into account your personal objectives, financial situation or needs. Because of that, you should consider the appropriateness of the advice, having regard to your personal objectives, financial situation and needs. If this document includes general advice about the acquisition or possible acquisition of a financial product, you should obtain and read the Product Disclosure Statement which relates to the financial product before making a decision about whether to acquire the product.