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Instant Asset Write-Off: Explainer

In addressing the economic impact of COVID-19, the Australian Federal Government announced a range of stimulus measures for business. One of key interest to Jade Finance business customers has been the Instant Asset Write-Off (IAWO). To assist business understand this initiative, we have provided this explainer.

IAWO Details

  • The threshold for IAWO has been increased from $30,000 to $150,000 for eligible businesses and eligible assets for a limited 15 month time period.
  • Eligible businesses are those with, as at 30 June 2020, an aggregated annual turnover of $500 million.
  • Eligible assets are new assets which are depreciable under Division 40 of the Taxation Act.
  • New assets, ie equipment, must be purchased and in operation by 30 June 2021.
  • A complete Australian Government fact sheet can be found at https://treasury.gov.au/sites/default/files/2020-04/Fact_Sheet-Delivering_support_for_business_investment.pdf
  • As with all major acquisitions, we advise you to refer to your accountant to ensure that taking advantage of this IAWO measure is suited to your business.

Finance Selection

Jade Finance has been operational throughout the COVID-19 crisis and is on hand to assist with your finance requirements in regard to this IAWO measure.

Considerations:-

  • Refer to the relevant Taxation Act to ensure the equipment, truck, marine vessel, motor bike, car or other asset is eligible.
  • Chattel Mortgage and Commercial Hire Purchase are suited to IAWO as they are on-balance sheet finance facilities.
  • Leasing, Rental and Rent to Own are off-balance sheet products and as such not suited to claim IAWO.
  • Selecting which finance product is best suited to your business should be done in consultant with your accountant. For example, the benefits to your business of leasing may outweigh the benefits of IAWO.

Asset Selection

From our analysis of the IAWO guidelines, a wide range of asset are eligible, these include:-

  • Trucks
  • Machinery
  • Motor vehicles, business cars
  • Marine vessels
  • Equipment for construction, manufacturing, medical facilities, general office operations, mining, agriculture and many more.

Both Federal and State and Territory Governments are flagging key sectors to play an important role in the COVID-19 economic recovery. These, along with other changes in the way society in general operates, will present opportunities for many businesses.

If you’re in this position, perhaps now is the time to consider asset acquisition and talk to us about the finance options.

To discuss your finance requirements, contact us on 1300 000 003 to speak with a Jade Finance consultant.

DISCLAIMER:THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.

 

 

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