What is the Instant Asset Write-Off (IAWO) Threshold?

The 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.

The IAWO is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.

Under instant asset write-off eligible businesses can:

  • immediately write off the cost of an asset that cost less than the instant asset write-off threshold amount
  • claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.

 

Funding

The instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second‑hand assets first used or installed ready for use in this timeframe.

The thresholds have changed over the last few years and are as follows:

Instant asset write-off thresholds
Date rangeThresholdEligible businesses
7.30pm (AEDT) on 2 April 2019 to 30 June 2020

$30,000

Less than $50 million turnover
29 January 2019 to 7.30pm (AEDT) on 2 April 2019

$25,000

Less than $10 million turnover
7.30pm (AEST) on 12 May 2015 to 28 January 2019

$20,000

Less than $10 million turnover
1 January 2014 to prior to 7.30pm (AEST) 12 May 2015

$1,000

Less than $10 million turnover
1 January 2012 to 31 December 2013

$6,500

Less than $10 million turnover
1 July 2011 to 30 June 2012

$1,000

Less than $10 million turnover

 

Eligibility

Small businesses with a turnover of less than $10 million

You are eligible to use instant asset write-off if all of the following apply:

  • your business has a turnover of less than $10 million
  • you are eligible for and have chosen to use the simplified depreciation rules
  • you purchased the asset from the relevant date
  • the asset cost less than the threshold at the time the asset was first used or installed ready for use.

Medium businesses with a turnover from $10 million to less than $50 million

You may be eligible to use instant asset write-off if all of the following apply:

  • your business has a turnover from $10 million to less than $50 million
  • you purchased the asset from 7.30pm (AEDT) on 2 April 2019
  • the asset cost less than the threshold at the time the asset was first used or installed ready for use.

For any assets purchased, used or installed ready for use prior to 7.30pm (AEDT) 2 April 2019, you must use the general depreciation rules.

 

Proposed Changes

On 12 March 2020, the government announced plans to:

  • increase the instant asset write-off threshold to $150,000 (up from $30,000)
  • expand eligibility to businesses with an aggregated annual turnover of less than $500 million (up from $50 million).

This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this timeframe.

The proposed changes do not take effect until new laws are passed. We will keep this page updated.

 

More Information