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  • If you no longer use simplified depreciation

    You may choose to stop using the simplified depreciation rules, or become ineligible to use them – for example, if your aggregated turnover is $10 million or more.

    In either case, you'll then use the general depreciation rules to calculate deductions for newly acquired assets.

    For depreciating assets in your small business pool when you stop using the simplified depreciation rules, you continue to claim a 30% deduction each year until the pool balance falls below the instant asset write-off threshold, then you deduct the remaining pool balance. You can't add more assets to the pool, and you can no longer claim an instant asset write-off for any new assets under these rules.

    See also:

    Lock out rules

    From 7.30pm (AEST) 12 May 2015 to 30 June 2021 the ‘lock out’ rules have been suspended. This is to allow small businesses that have chosen to stop using the simplified depreciation rules to take advantage of the increase in the instant asset write-off threshold.

    Before this period, the 'lock out' rules prevented small businesses from re-entering the simplified depreciation system for five years if they had opted out.

    Starting to use the simplified depreciation rules again

    If you have stopped using the simplified depreciation rules, and then start using them again, you must adjust the opening pool balance for any depreciating assets that you have started using or installed ready to use since last using these rules.

    Your new opening pool balance will be your previous closing balance plus the taxable purpose proportion of the value of any depreciating assets you've not previously added to the pool.

      Last modified: 23 Jun 2020QC 21100