Capital allowances: deductible business related costs - pre July 2005

Background

From 1 July 2001, uniform capital allowance (UCA) rules apply to most depreciating assets, including those acquired before that date. The UCA rules consolidate a range of former capital allowance provisions. It does this by providing a set of general rules that apply across a variety of depreciating assets and certain other expenditure. It maintains some concessional tax treatments, and also introduces new deductions for certain types of capital expenditure that did not previously attract a deduction.

Taxpayers now calculate deductions for the decline in value of their depreciating assets using these rules. This means that if you were deducting amounts under one of the former capital allowance provisions that has been consolidated, you can calculate the decline in value under the UCA system.

However, eligible taxpayers that elected to enter the former simplified tax system (STS) or who are eligible to use the simplified depreciation rules for small business entities will generally calculate deductions for their depreciating assets under the special former STS rules or the simplified depreciation rules.

The information provided here only relates to expenditure incurred between 1 July 2001 and 30 July 2005. Different rules apply to expenditure incurred from 1 July 2005. If you have expenditure of this nature incurred after 1 July 2005, read Blackhole expenditure: business related expenses.