Accelerated depreciation of new business assets

Overview

Eligible businesses, for the 2019–20 and 2020–21 income years, may be able to deduct the cost of new depreciating assets at an accelerated rate using the backing business investment – accelerated depreciation rules.

For each new asset, the backing business investment – accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose.

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Eligible businesses

Businesses are eligible for the backing business investment – accelerated depreciation deduction if they have an aggregated turnover of less than $500 million in the year they are claiming the deduction. The deduction is available in the 2019-20 and 2020-21 income years.

Eligible assets

The depreciating asset must:

• be new and not previously held by another entity (other than as trading stock)
• be first held on or after 12 March 2020
• first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021
• not have had either of the following applied:
  • temporary full expensing
  • the instant asset write-off rules.