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 annual turnover is $2 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. But you can't add more assets to the pool, and you can no longer claim an instant asset write-off for any assets under these rules (including when the pool's balance falls below the instant asset write-off threshold).

See also:

Lock out rules

From 7.30pm AEST 12 May 2015 to 30 June 2017 the ‘lock out’ rules have been suspended 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: 05 Jul 2016QC 21100