The past few years have seen the depreciation rules change several times; 50% upfront deductions for new plant & equipment under the ‘Backing Business Investment’, increasing the Instant Asset Write to $150,000 and most significantly, from the 6th of October 2020, including Temporary Full Expensing (TFE), which effectively uncapped Instant Asset Write-Off.
After a few years and some substantial depreciation claims, thanks to full expensing, all good things must come to an end. TFE will end on the 30th of June 2023, and eligible plant & equipment must be installed & ready for use by the 30th of June to advantage of these measures.
The downside to the TFE will come in the following years as the plant & equipment that have been fully claimed, when sold, will have no balancing charges or cannot be offset, resulting in 100% profit on sale, so planning for these events will be essential.
As of writing this piece, we are still unclear what precisely the Instant Asset Write-Off will look like post-30th of June 2023; we will hopefully get a clear picture of the Federal Budget in early May. We at Green Taylor Partners will be eagerly awaiting these updates and our clients as soon as we have the details.
Plant & Equipment