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Instant asset write-off measure for 2024–25 introduced into Parliament

Tax

A bill to set the instant asset write-off threshold to $20,000 for 12 months over the 2024–25 income year has been introduced into the lower house, with the 2023–24 measure still yet to pass.

By Miranda Brownlee 12 minute read

The government introduced the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 on Wednesday, which implements the instant asset write-off measure announced in this year’s budget.

Schedule 7 of the bill extends the $20,000 instant asset write-off for 12 months until 30 June 2025.

It allows small businesses with an aggregated annual turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use on or before 30 June 2025.

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However, the measure is dependent on the instant asset write-off measure for the 2023–24 income year being passed by Parliament first.

“Schedule 7 to the Bill does not commence at all if Schedule 1 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 does not commence,” the EM said.

Schedule 7 to the bill commences on the later of:

• The first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives the Royal Assent.

• Immediately after the commencement of Schedule 1 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024.

The instant asset write-off measure for the 2023–34 year remains stalled in Parliament with different political parties in disagreement over what the measure should be set at and what businesses should be able to use it.

Last month the the Assistant Treasurer moved that the House insist on disagreeing with amendments insisted on by the Senate. The House of Representatives voted in favour of the motion.

The amendments made by the Senate include increasing the instant asset write-off threshold to $30,000 instead. The amendments also expanded the range of businesses able to access the measure to businesses with an aggregated turnover of less than $50 million.

Originally, the Support for Small Business and Charities and Other Measures Bill proposed to increase the threshold to $20,000. The original bill also outlined that the measure would apply to businesses with an aggregated turnover of less than $10 million.

Under the current law, the instant asset threshold is set at $1,000 only for the 2023–24 income year.

Industry groups and bodies have stressed the need for a permanent increase in the instant asset write-off to be made to resolve the uncertainty around the measure.

“We need to move away from annually drip-feeding a policy measure that is clearly favoured by both sides of the political divide and businesses,” Robyn Jacobson from the Tax Institute said in a recent opinion piece.

“Businesses deserve certainty and stability in the tax system so they can make decisions based on actual law, not pending announcements.”

Miranda Brownlee

Miranda Brownlee

AUTHOR

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on:miranda.brownlee@momentummedia.com.au
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