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Under this measure small businesses with an aggregated turnover of less than $10 million, can deduct the following. NB: The second element referred to below generally refers to amounts a small business has paid after the asset was acquired to bring it to its present condition and includes improvements and upgrades to assets. It is best to discuss timing and clarification of any possible ‘second element’ spending and claims with your accountant first.

• the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2024 and 30 June 2025
• it only relates to Plant, Equipment and Vehicles. It does NOT relate to Capital improvements to buildings
• the items can be new or second hand. You can have paid cash or they can be financed
• the entity must operate a business during the 2025 income year.
• choosing to apply the simplified depreciation rules for the 2025 income year is necessary
• an amount included in the second element (cost addition) of eligible depreciating asset's cost that they have incurred between 1 July 2024 and 30 June 2025, if they claimed an immediate deduction for the asset under the simplified depreciation rules in a prior income year where the amount is:
  • the first amount of second element cost incurred after the end of the income year in which the asset was written off; and
  • less than $20,000.

The $20,000 limit under the measures applies on a per asset basis, so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that. In addition, pool balances under $20,000 at the end of 2024-25 income year can be written off.

More information:

• Eligibility for instant asset write-off