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Re: 150 K write off compulsory ?

Devotee

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Replies 6

Hi , Pls assist me

 

Q. Is the 150 K write off compulsory for Non Small Business Entities ? (aggregated turnover of $10 million or more but less than $500 million).

 

If not compulsory , should the entity declare that it is opting out of  150 K write off  in the tax return ?

 

Thanks

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Most helpful response

ATO Community Support

Replies 1

Hi @Joachim

 

I've done some further investigating and found that if the instant asset write off (IAWO) applies to an eligible asset of an eligible business then you can't opt out of it. This includes if the business is using General depreciation.

 

Our website states that General deprecation rules apply to most assets unless IAWO applies or if a Small business chooses to use Simplified depreciation.

 

We have produced a snap-shot about the interaction of tax depreciation incentives. If more than one incentive can be applied to an asset then the order of application is -

 

1. Temporary Full Expensing

2. Instant Asset Write Off

3. Backing Business Investment

4. General Depreciation

 

These of course are subject to opt out choices. If you refer to page 2 of the snap shot it shows you which businesses are eligible for each incentive and the incentives you can and can't opt out of.

 

 

 

6 REPLIES 6

Community Moderator

Replies 5

Hi @Joachim,

 

If you're using simpler depreciation for small business, you must apply all the rules. This includes the instant asset write-off. There are special rules when using temporary full expensing if you're using simpler depreciation, too. This includes not being able to opt-out of temporary full expensing.

 

But, you get to choose which depreciation method you use - simpler depreciation, or general depreciation rules. If you choose general depreciation, you can't use the instant asset write-off. But, for assets acquired after 6 October 2020, you may be able to access temporary full expensing.

 

Temporary full expensing doesn't have a threshold. If you're using general depreciation, you can opt-out on an asset-by-asset, and year-by-year basis.

 

You can read about the instant asset write-off and temporary full expensing on our website.

 

**updated 6 September to reflect accurate information**

Taxicorn Registered Tax Practitioner

Replies 0

As the deduction method is optional, we won't be expecting you to use it.

You shouldn't need to let us know that you're opting out of it.

 

Then why do we have items P11 and P12 on Form I ?

 

Just watched the NTAA Tax School Day 1 depn section  -  their view was completely different.

 

ATO Community Support

Replies 0

Hi @Bruce4Tax

 

Thanks for stepping in and keeping us accountable Smiley Happy

 

You're right, and we've corrected our earlier response to reflect this.

Devotee

Replies 2

Hi @Dan_ATO 

 

Thank you

 

Sorry , but I cannot agree with one of the points you have made. The link you have provided also contradicts it.

 

 If you choose general depreciation, you can't use the instant asset write-off. "

 

Please visit the link you have provided and refer to the heading.

 

Instant asset write-off thresholds for businesses with an aggregated turnover of $10 million or more but less than $500 million.

 

I am sorry if I have misunderstood what you have said.

 

But per the link it is possible for an entity which is using general depreciation rules to utlise the instant asset write off from 2nd April 2019.

 

Pls have a look when time permits.

 

Thanks again.

 

Most helpful response

ATO Community Support

Replies 1

Hi @Joachim

 

I've done some further investigating and found that if the instant asset write off (IAWO) applies to an eligible asset of an eligible business then you can't opt out of it. This includes if the business is using General depreciation.

 

Our website states that General deprecation rules apply to most assets unless IAWO applies or if a Small business chooses to use Simplified depreciation.

 

We have produced a snap-shot about the interaction of tax depreciation incentives. If more than one incentive can be applied to an asset then the order of application is -

 

1. Temporary Full Expensing

2. Instant Asset Write Off

3. Backing Business Investment

4. General Depreciation

 

These of course are subject to opt out choices. If you refer to page 2 of the snap shot it shows you which businesses are eligible for each incentive and the incentives you can and can't opt out of.

 

 

 

Devotee

Replies 0

Hi @AriH Many  thanks.