New instant asset write-off threshold for farm businesses
NEED new machinery or equipment? Now’s the time to buy because the Australian Taxation Office has recently announced some good news.
As part of the 2019-20 budget, the Government has increased the instant asset write-off threshold and extended the simple depreciation rules to more businesses.
As of 7.30pm on April 2, the instant asset write-off threshold increased from $25,000 to $30,000, and businesses with a turnover up to $50 million became eligible for the write-off. This increase and extension is valid until June 30, 2020.
So, primary producers with a turnover of less than $50 million can claim a deduction of up to $30,000 for the business portion of new vehicles, computers, tractors and machinery bought and first used, or installed ready for use, from April 2 at 7.30pm to June 30, 2020.
New and second-hand purchases are eligible. Any assets that cost more than $30,000 must be deducted over time.
If you gained the asset between January 29 and April 2 this year, you can claim $25,000. Any items bought before January 29 are eligible for the $20,000 threshold.
Deductions are limited to the percentage used for business purposes.
Primary producers may also be able to immediately deduct the cost of fodder storage assets, such as silos and hay sheds, first used on or after August 19, 2018.
The Government extended instant deduction rules to these items to make it easier to invest in and stockpile fodder.
If you store fodder for sale, the deduction may also be applicable.
Also, since the 2015-16 Budget, primary producers have been able to immediately deduct the cost of fencing and water facilities, such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.
Finally, farmers affected by drought or other natural disasters may be granted more time to pay tax, have penalties waived for the time of drought, receive interest-free payment plans and take advantage of incentives.