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In making his determination, the Commissioner assumes the depreciating asset is new and has regard only to general industry circumstances of use.
The table attached to Taxation Ruling IT 2685-Income tax: depreciation lists the effective life of various items of plant as determined by the Commissioner. IT 2685 was issued on 11 June 1992 and remained in force until it was replaced by Taxation Ruling TR 2000/18-Income tax: depreciation effective life. TR 2000/18 came into force on 1 January 2001 and lists the Commissioner's determination of effective life for various depreciating assets. To find out how to get these rulings, see the inside front cover.
As a general rule, the schedule of effective lives accompanying IT 2685 should be used for depreciating assets acquired or started to be constructed before 1 January 2001. The schedule accompanying TR 2000/18 should be used for depreciating assets acquired or constructed on or after 1 January 2001.
Because the Commissioner often reviews his determinations of effective life, more than one determination might be in force during an income year. You generally adopt the determination that is in force at the time you enter into a contract to acquire an asset, you otherwise acquire it, or you start to construct it. However, if the asset's start time does not occur within 5 years of this time, you must use the determination that is in force at the asset's start time. For a depreciating asset acquired under a contract or otherwise, or started to be constructed before 11.45 am (by legal time in the ACT) on 21 September 1999, there is no restriction on the period within which the asset must be first used.
IT 2685 contains depreciation rates-accelerated rates and broadbanded rates-which should only be used for plant that was acquired before 21 September 1999 or by certain small business taxpayers before 1 July 2001-see Accelerated depreciation.
For an extract from the rulings showing the effective lives of some commonly used items, see Extracts from Taxation Ruling IT 2685 and Taxation Ruling TR 2000/18-effective lives.
Last modified: 01 Jun 2005QC 27399