Government to permanently extend $20,000 instant asset write-off
The Government has recently introduced legislation that would make the $20,000 instant asset write-off permanent for small businesses (as announced in the 2026 Federal Budget).
If enacted, the changes would:
- permanently set the instant asset write-off threshold at $20,000 (instead of $1,000) for eligible depreciating assets first used, or installed ready for use, for a taxable purpose from 1 July 2026; and
- permanently set the general small business pool threshold at $20,000 from 1 July 2026.
The changes would also further suspend the ‘lock-out rule’ until 30 June 2027.
Editor: This rule otherwise prevents a business that has chosen not to use the simplified depreciation rules from re-entering the regime for five years.
Government to re-introduce loss carry back for companies
The Government has also recently introduced legislation to re-introduce the ‘loss carry back’ measure for companies from 1 July 2026.
If enacted, this will allow most companies to carry back a tax loss and apply it against tax paid in either, or both, of the previous two income years, basically giving rise to a tax refund for the loss year.
Division 7A benchmark interest rate
The ATO has published a Division 7A benchmark interest rate of 8.77% for the income year ending 30 June 2027, up from 8.37% for the previous income year.
Editor: The benchmark interest rate is applied when calculating minimum yearly repayments (‘MYRs’) for complying Division 7A loans.
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Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
