Treasury Laws Amendment (Tax Reform No. 2) Act 2026 (71 of 2026)

Schedule 2   $20,000 instant asset write-off for small business entities

Income Tax Assessment Act 1997

8   Subsection 328-210(3) (example)

Repeal the example, substitute:

Example: Cassidy's Gardens is a small business entity for the 2024-25 income year and chooses to use this Subdivision for that year. The business has an opening pool balance of $28,500 for its general small business pool for that year.

During that year, Cassidy acquired a new ride-on lawn mower for $21,000. The taxable purpose proportion of its adjustable value is:

$21,000 × 80% business use estimate = $16,800

Cassidy also sold her business car for $29,600 during that year. The car was used 100% in the business.

To work out whether she can deduct an amount under this section, Cassidy uses this calculation:

$28,500 + $16,800 - $29,600 = $15,700

Because the result is less than $20,000, Cassidy can deduct the $15,700 for the income year. The pool's closing balance for the year is zero.