SOLUTIONS
Instant Asset Write off
If you are a small business owner in Australia, the instant asset write-off could offer you a significant tax advantage.
This incentive allows eligible businesses to immediately deduct the full cost of qualifying assets rather than spreading the cost over several years. This can help reduce your tax burden and offset the costs of investing in new equipment or setting up your business.
How does it work?
The instant asset write-off is an Australian tax deduction scheme that allows eligible businesses to claim an immediate deduction for the total cost of qualifying assets.
Unlike traditional tax deductions, where businesses depreciate the asset value over several years, this scheme enables businesses to declare the entire amount in the same financial year the asset is purchased or installed.
As a practical example, if your business purchases an eligible asset for $18,000, you can deduct the full $18,000 from your taxable income in the current financial year, reducing your overall tax liability and potentially saving thousands of dollars.
Key points to remember:
• The asset must be used for business purposes.
• There are specific thresholds and eligibility criteria.
• Both new and second-hand assets may qualify.
• Multiple assets can be claimed, provided each is below the threshold.
• Businesses have the option to spread tax breaks over time if preferable.
Unlike traditional tax deductions, where businesses depreciate the asset value over several years, this scheme enables businesses to declare the entire amount in the same financial year the asset is purchased or installed.
As a practical example, if your business purchases an eligible asset for $18,000, you can deduct the full $18,000 from your taxable income in the current financial year, reducing your overall tax liability and potentially saving thousands of dollars.
Key points to remember:
• The asset must be used for business purposes.
• There are specific thresholds and eligibility criteria.
• Both new and second-hand assets may qualify.
• Multiple assets can be claimed, provided each is below the threshold.
• Businesses have the option to spread tax breaks over time if preferable.
What is the eligibility criteria?
To claim an immediate deduction for an asset using the instant asset write-off, you must meet the following criteria:
Aggregated turnover – The business must have an aggregated turnover of less than $10 million in financial year 2024-2025. This includes the annual turnover of your business as well as that of any affiliated or connected business entities.
Purchase date – The asset must be purchased within the relevant financial year.
Usage date – The asset must be first used or installed and ready for use within the relevant financial year.
Cost threshold – The cost of the asset must be less than the specified $20,000 threshold.
Various business structures under Australian law are eligible, including:
Sole traders – Individuals running their own business can deduct the cost of eligible assets immediately to reduce taxable income.
Partnerships – Partners in a business can jointly invest in assets and receive immediate tax benefits, lowering each partner’s tax burden.
Companies – As separate legal entities, companies can reduce their corporate tax liabilities by claiming instant asset write-offs.
Trusts – Trusts can invest in business assets and claim immediate deductions, optimizing the tax liabilities of beneficiaries.Tip: For the latest policies, view the Australian Taxation Office (ATO) guidelines.
Aggregated turnover – The business must have an aggregated turnover of less than $10 million in financial year 2024-2025. This includes the annual turnover of your business as well as that of any affiliated or connected business entities.
Purchase date – The asset must be purchased within the relevant financial year.
Usage date – The asset must be first used or installed and ready for use within the relevant financial year.
Cost threshold – The cost of the asset must be less than the specified $20,000 threshold.
Various business structures under Australian law are eligible, including:
Sole traders – Individuals running their own business can deduct the cost of eligible assets immediately to reduce taxable income.
Partnerships – Partners in a business can jointly invest in assets and receive immediate tax benefits, lowering each partner’s tax burden.
Companies – As separate legal entities, companies can reduce their corporate tax liabilities by claiming instant asset write-offs.
Trusts – Trusts can invest in business assets and claim immediate deductions, optimizing the tax liabilities of beneficiaries.Tip: For the latest policies, view the Australian Taxation Office (ATO) guidelines.
What assets are eligible?
The instant asset write-off can be used for:
• Multiple assets if the cost of each individual asset is less than the relevant threshold.
• New and second-hand assets.
Most business assets under the cost threshold are eligible, including:
• Vehicles (subject to limits)
• Office furniture and equipment
• Tools and machinery
• Computer hardware
• Point of sale systems
• Solar panels
Exclusions:
• Assets leased out
• Software allocated to a development pool
• Capital works and building improvements
• Assets used mainly for research and development
Tip: Check the latest inclusions and exclusions on the ATO website before purchasing.
• Multiple assets if the cost of each individual asset is less than the relevant threshold.
• New and second-hand assets.
Most business assets under the cost threshold are eligible, including:
• Vehicles (subject to limits)
• Office furniture and equipment
• Tools and machinery
• Computer hardware
• Point of sale systems
• Solar panels
Exclusions:
• Assets leased out
• Software allocated to a development pool
• Capital works and building improvements
• Assets used mainly for research and development
Tip: Check the latest inclusions and exclusions on the ATO website before purchasing.
Whatever your industry, we can help
Geared Finance has over 20 years of experience catering to the needs of businesses across Australia. No matter what industry you are in, we have finance solutions to ensure your vision becomes a reality
Don’t take our word for it! Hear it from our customers.
We have been working with Geared Finance for the past 4 years and always found their service attentive and prompt. Geared provides a high level of customer service and works with us to create bespoke solutions that suit our business. They are always professional, supportive, and ready to assist.
Sandra Giannakopoulos
•
Sodexo
Sandra Giannakopoulos
•
Sodexo
Geared Finance has supported our business in many ways. From equipment and solar to software and vehicles, they offer solutions across the board. With competitive rates and fast service, they provide advice and experience that help our business grow. We’re proud to be a loyal client of Geared Finance.
Adam Pope
•
Fabulous Catering
Adam Pope
•
Fabulous Catering
Geared Asset Finance has financed our school’s IT equipment over the years. As a school, we need flexibility and an understanding of financial cycles, which they provide. Their support and service are reliable, and we’ve always felt confident working with them. We highly recommend them to others.
Manuel Pappos
•
Alphington Grammar School
Manuel Pappos
•
Alphington Grammar School
The team at Geared Asset Finance has been phenomenal. They handle our business finances from start to finish and are always available to help. Their long-term support has made a real difference to us. We’ve trusted them for years, and we’re sure we’ll continue to work with them well into the future.
Mark Clarke
•
Geelong Collision Care
Mark Clarke
•
Geelong Collision Care
I have been working with Geared Finance for over 10 years. During this time, they have helped us with our equipment finance needs and have been a pleasure to deal with. The team is responsive, fast, and easy to work with. They go above and beyond, even liaising with suppliers to streamline the process.
Guy Greenstone
•
Stomping Ground Brewing Co.
Guy Greenstone
•