If you add a new asset to an existing small business pool, you claim:
- 15% of the taxable purpose portion of the asset’s cost in in the year you start to use it or have it installed ready for use
- 30% of the opening balance of the pool deduction (after adjustments for changes in taxable purpose) in each year after the first year.
Example
In the 2023-24 and 2024-25 income years, the instant asset write-off threshold amount is $20,000.
Gary has an existing small business pool balance of $21,000 in 2023-24 and adds a new asset costing $22,000 to it.
In his 2023-24 tax return, Gary can claim a $9,600 deduction calculated as:
- 15% of the $22,000 new asset, which is $3,300, and
- 30% of the $21,000 opening pool balance, which is $6,300.
The closing pool balance for 2023-24 will be $21,000 (opening pool balance) + $18,700 (new asset added to the pool $22,000-$3,300) - $6,300 (pool deduction claimed) = $33,400.
In following years, if Gary’s small business pool doesn’t change, he can claim 30% of the opening pool balance of $33,400. So in 2024-25, Gary may be able to claim a $10,020 deduction.
Gary can continue to claim 30% of the opening pool balance until the income year when the opening balance of his small business pool, plus the amount for any new assets added that year, is below the instant asset write-off threshold.
Once it is below the instant asset write-off threshold, Gary can deduct his remaining small business pool balance in his tax return and the pool balance becomes zero.
