The higher Instant Asset Write-Off (IAWO) threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write‑off multiple assets.

Eligibility


Eligibility to use instant asset write-off depends on:

  • your aggregated turnover (the total ordinary income of your business and that of any associated businesses)
  • the date you purchased the asset
  • when it was first used or installed ready for use
  • the cost of each asset being less than the threshold.

The criteria have changed over time so make sure you check whether your business is eligible.

You are not eligible to use instant asset write-off on an asset if your aggregated turnover is $500 million or more.

If temporary full expensing applies to the asset, you do not apply instant asset write-off.

 

Temporary full expensing

For assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 7.30pm (AEDT) on 6 October 2020 to 30 June 2022, the instant asset write-off threshold does not apply. You can immediately deduct the business portion of the asset's cost under temporary full expensing.

Learn more about temporary full expensing on the Australian Taxation Office website.

Timing


This applies from 12 March 2020 to 30 June 2021 providing the asset is purchased by 31 December 2020.

How to apply


The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business's eligibility and ensure you apply the correct threshold amount as stated by the Australian Taxation Office (ATO).

Learn more about the increasing the Instant Asset Write-Off.