# ATO: Instant asset write-off and the car limit



## Jack Malarkey (Jan 11, 2016)

From the Australian Taxation Office's small business newsroom:

https://www.ato.gov.au/Newsroom/smallbusiness/General/Instant-asset-write-off-and-the-car-limit/

*Instant asset write-off and the car limit*








*14 September 2020*
If your business is eligible to claim the instant asset write-off, you need to consider the car limit. The car limit is the maximum depreciation expense you can claim for a car.
The car limit applies to the cost of some passenger vehicles. It applies to passenger vehicles designed to carry a load less than one tonne and fewer than nine passengers. It does not apply to motorcycles or similar vehicles, or to vehicles fitted out for use by people living with a disability.
The car limit is:
$57,581 for the 2019-20 income tax year
$59,136 for the 2020-21 income tax year.
Here are some tips to help you get it right:
If the car limit applies to your vehicle, you can only claim a deduction for the business portion of the car limit.
To use the instant asset write-off you must have used your vehicle, or had it delivered ready for use, between 12 March and 31 December 2020.
When calculating car depreciation amounts:
If you're registered for GST and can claim the full GST credit, exclude the GST amount you paid on the car.
If you're not registered for GST, include the GST amount you paid on the car.
You can't claim the excess cost over the car limit under any other depreciation rules.
Remember, registered tax agents can help you with your tax.
*Find out about:*
Instant asset write-off for eligible businesses
Claiming a tax deduction for motor vehicle expenses


----------



## Boofhead (Oct 19, 2016)

Thanks Jack though could you please peer into your crystal ball and see if this will be extended until say 30th June, 2021 ???


----------



## Jack Malarkey (Jan 11, 2016)

Boofhead said:


> Thanks Jack though could you please peer into your crystal ball and see if this will be extended until say 30th June, 2021 ???


My guess is that they will end up extending it to 30 June 2021 but with a lower threshold (perhaps $75,000 or $60,000).


----------



## Jack Malarkey (Jan 11, 2016)

Note that the sale of cars can push up actual GST turnover, thereby making some ineligible for extended jobkeeper payments. See:

https://www.google.com.au/amp/s/amp...b/news-story/9ba09feda477d31fea5d134be2d5ce39
If you claimed a GST credit on the purchase of the car, the sale of the car is subject to GST. This is so even for a private sale to an individual not in business.

GST turnover doesn't take into account the cost of a replacement car including if you claim a GST credit on the purchase.

See:

https://www.ato.gov.au/Business/GST...-and-transport/GST-and-motor-vehicles/?page=3


----------

