instant asset write-off 2025 — $20k threshold, end date uncertainty
small business client bought a $18,500 commercial ute in February 2025. wants to claim instant asset write-off on 2024-25 return.
rules as i understand them:
- $20k threshold for IAWO extended to 30 June 2025 (announced in 2024-25 budget, legislated)
- aggregated turnover under $10M required (client is well under)
- asset must be first used or installed ready for use by 30 June 2025
- applies PER asset (not cumulative)
the $18,500 ute is under $20k, client is under $10M turnover, first used April 2025. qualifies.
but 2025-26 threshold is uncertain — some budget papers suggest reverting to $1,000 unless extended. clients asking about planning and i don't want to make promises.
anyone have a cleaner read on the 2025-26 outlook? the treasury press releases have been vague.
2 replies
update — the 2025-26 federal budget (March 2025) extended the $20k IAWO for another year to 30 June 2026. so 2025-26 is safe at $20k.
but it's year-by-year extensions now — no permanent policy. i tell clients to plan asset purchases as if $20k is the current rule but don't assume it'll continue past June 2026.
one watch-out: if asset is $20k or more, it falls into the simplified depreciation pool (15%/30%) which is a slower write-off. the cliff at exactly $20k matters.
US equivalent is §179 expensing ($1.22M 2025 limit) + §168(k) bonus depreciation (40% in 2025, phasing out). different mechanics but similar "small business immediate deduction" concept. AU's $20k threshold is way lower than US §179 — different approach to what counts as "small".
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