1st June 2020   |   Tax

There has been a lot of confusion of the $150,000 instant asset write-off tax incentive introduced by the Federal Government, especially in relation to cars. The scheme scheduled to run from 12 March 2020 to 30 June 2020, the close of this financial year and the threshold amount for each asset is $150,000 (up from $30,000). However,   only applies to certain types of motor vehicles.

In most cases, the limit that can be claimed as a whole amount for an instant asset write-off for a motor vehicle in this financial year is in fact $57,581 excluding GST, well short of the $150,000 headline number, as the luxury car limit still applies to motor vehicles.

New and used motor vehicles designed to carry a load of less than one tonne and fewer than nine passegers (that is, regular passenger cars, SUVs and utes) subject to business use, may be able to claim an immediate deduction where the cost is less than $57,581 excluding GST. Previously the limit of a motor vehicle under the instant asset write-off scheme was $30,000 excluding GST.

However, certain vehicles may be eligible to claim an immediate deduction of up to $150,000.

Some utes which cost in excess of $60,000, and US-style pick-ups which cost from $80,000 to $150,000, could be eligible for an immediate tax deduction.

With both cases, you’ll still have to consider the percentage of business use and FBT.

So before going out and buying a $150,000 motor vehicle, thinking it is fully tax deductable, please have a chat to us, info@ax3.com.au

Please note this information is general in nature and should not be used as a substitute for your own professional advice. Any tax benefit that may be available will be subject to your own circumstances.

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