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  • The uniform capital allowance system

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    The UCA provides a set of general rules that applies across a variety of depreciating assets and certain capital expenditure. It does this by consolidating a range of former capital allowance regimes. These regimes were complex and inconsistent, and involved significant replication of parallel but not identical provisions and concepts. Most of these deficiencies are overcome by consolidating capital allowance provisions, including those relating to:

    • plant
    • software
    • mining and quarrying
    • intellectual property
    • spectrum licences
    • forestry roads and buildings.

    The UCA maintains the treatment of some depreciating assets and capital expenditure such as certain primary production depreciating assets and capital expenditure. It also introduces new deductions for types of capital expenditure that did not previously attract a deduction, such as certain business and project related costs - refer to Capital expenditure deductible under the UCA for more information.

    Deductions for the cost of your depreciating assets, including those acquired before 1 July 2001, are now worked out using the UCA rules. You can deduct an amount for the decline in value of a depreciating asset you hold to the extent that you use it for a taxable purpose.

    However, eligible taxpayers who elect to enter the Simplified Tax System (STS) will generally calculate deductions for their depreciating assets under the STS rules, see STS taxpayers.

    Last modified: 11 Dec 2019QC 27399