In-house software



This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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Under the UCA rules, you can choose to allocate to a software development pool expenditure you incur in developing (or having developed) in-house software you intend to use solely for a taxable purpose. Once you have allocated expenditure on such software to a pool, all such expenditure incurred thereafter-in that year or in a later year-must also be allocated to a pool. A different software development pool must be created for each year in which you have such expenditure-see In-house software.

If you have allocated such expenditure to a software development pool either before or since entering the STS, you must again allocate such expenditure to a software development pool and calculate your deductions under the UCA.

If you have not previously allocated such expenditure to a software development pool and you choose not to do so this year or if the expenditure was incurred in developing in-house software which you do not intend using solely for a taxable purpose, you can capitalise it into the cost of the unit of software developed and claim deductions for the unit of in-house software under the STS rules when it starts to be used or is installed ready for use for a taxable purpose.

Deductions for in-house software acquired off the shelf by an STS taxpayer for use in their business are available under the STS rules. For example, an item costing less than $1,000 will qualify for an outright deduction.

Last modified: 01 Jun 2005QC 27399