Summary of Low-Value Asset Write-Off Rules

Summary of Low-Value Asset Write-Off Rules

Your company can choose to write off low-value assets within one year, with a maximum total claim of $30,000 per Year of Assessment (YA). Further, here are the key points:

1. Definition of Low-Value Asset:

   • Cost does not exceed $5,000 per asset.
   • Includes assets acquired under hire purchase terms if the original cost is $5,000 or less.

2. Write-Off Options:

   • 1-Year Write-Off: Up to $30,000 total claim per YA.
   • Alternative Write-Off Periods: Over 2 years (specifically for YAs 2021 and 2022), 3 years, or the asset’s prescribed working life.

3. Eligibility for 1-Year Write-Off:

   • Assets acquired in the current YA.
   • Assets acquired before the current YA, provided no prior capital allowance claim was made or there is a tax written-down value brought forward.

4. Exceeding the $30,000 Cap:

   • If total low-value assets exceed $30,000, the excess can be written off over 2 years (for YAs 2021 and 2022), 3 years, or the prescribed working life.

Finally, this summary simplifies the guidelines for writing off low-value assets, ensuring clarity for your SEO content.