As most of you are aware the government has extended the instant asset write off $150,000 until 31 December 2020. On 1 January 2021 this amount will revert to $1,000. This is great news for a lot of businesses.
One thing you need to know before you head out and purchase a motor vehicle is that the luxury car limit is still in place. If you purchase a motor vehicle that is designed to carry people and has a load of over one tonne then there is a limit of $57,581 in 2019/2020. The limit has increased to $59,136 for the 2020/2021 financial year.
For example, if you purchased a Ute for $65,000 in September 2020, you will not be able to claim the full amount of that Ute under the instant asset write off. As the limit is $59,136 you will only be able to claim the $59,136, the remainder will have to sit on the Balance Sheet as an asset until you either scrap the motor vehicle or sell it. In this example you will have $5,864 sitting in your Balance Sheet.
Just remember on 1 January 2021 any assets purchased over $1,000 will need to be depreciated.