Just under a month to go before the Temporary Full Expensing Measures finish up
The temporary full expensing rules allow eligible businesses to claim a tax deduction for the full cost of eligible depreciable assets (except for motor vehicles which are subject to the current car cost limit of $64,741).
Key changes
- The temporary full expensing measures that have allowed small and medium businesses to write off the full cost of new assets, with no limit, (other than the cost limit on motor vehicles) is scheduled to end on 1 July 2023
- Any business considering purchasing assets and utilising these measures prior to this date should plan now — it is important to note that to receive the deduction, an asset must be installed and ready for use.
To claim the deduction in full, in the year the asset is acquired, the asset must be installed and ready for use and must be used for a taxable purpose.
Temporary full expensing supports businesses and encourages investment, as eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use for a taxable purpose.
From 1/7/2023 to 30/6/2024, businesses with turnover up to $10M will be entitled to claim an immediate tax deduction for assets costing $20,000 or less. Assets purchased above this amount will not get an immediate deduction.