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  • Capital allowances: review of assets used in wooden and upholstered furniture (including seat) manufacturing industry

    We have started a review of the assets used in the wooden and upholstered furniture (including seat) manufacturing industry defined within ANZSIC code 25110 with a view to making new effective life determinations.

    Effective lives are used to work out how much you can claim as a tax deduction for an asset's decline in value (depreciation deduction).

    The purpose of our review is to ensure our effective life determinations cover assets used by your industry and reflect current industry practices and expectations. Our determinations provide you with 'safe harbour lives'.

    You also have the option to self-assess effective lives.

    Scope of the review

    It's anticipated the review will cover assets that relate to primary activities, namely:

    • wooden bedroom suite manufacturing
    • chair manufacturing (except dental chairs fitted with mechanical devices)
    • wooden dining room furniture manufacturing
    • wooden disassembled furniture manufacturing
    • wooden disassembled kitchen furniture manufacturing
    • wooden furniture part manufacturing
    • furniture reupholstering
    • lounge suite manufacturing
    • wooden office furniture manufacturing
    • wooden outdoor furniture manufacturing
    • seat, upholstered, manufacturing
    • wooden table manufacturing
    • upholstered furniture manufacturing.

    We expect to complete our review of these assets within 12 months, with new effective life determinations applying from 1 July 2022. Draft effective lives will be issued for public comment well before final decisions are made.

    How we will conduct the review

    As part of this review, we will:

    • identify the assets currently used in the industry
    • consult with major interest groups, such as
      • industry representative bodies
      • users and suppliers (including using interviews and site asset inspections)
    • complete a report with recommendations for new effective lives based on an analysis of the factors listed in the effective life taxation ruling
    • remove/update redundant items currently in the effective life schedule.

    See also:

    • TR 2020/3 Income tax: effective life of depreciating assets (applicable from 1 July 2020)

    Participating in the review

    Participation in the review process is voluntary. However, we find strong participation from an industry gives its members confidence that we will properly consider their range of experience, and that the determinations will be useful to industry members.

    If you would like to participate in the review, contact:

    Susan Li

    For more information about the review process, including examples of the type of questions we like to ask industry members, refer to Capital allowances: effective life reviews – general information

    For more information about reviews we have already completed, refer to Capital allowances: completed effective life reviews.

      Last modified: 07 Jun 2021QC 65855