• Not part of a set

    Attention

    Warning:

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

    End of attention

    Whether items form a set needs to be determined on a case by case basis. Items may be regarded as a set if they are:

    • interdependent on each other
    • marketed as a set, or
    • designed and intended to be used together.

    It is the cost of a set of assets you acquire in the income year that must not exceed $300. The test cannot be avoided by buying parts of a set separately.

    Example

    Set of items

    (The impact of the GST is ignored in this example).

    In the 2003-04 income year Paula, a primary school teacher, buys a series of six progressive reading books costing $65 each. The books are designed so that pupils move on to the next book only when they have successfully completed the previous book. The books are marketed as a set and are designed to be used together. The six books would be regarded as a set. Paula cannot claim an immediate deduction for any of these books because they form part of a set which she acquired in the income year and the total cost of the set is more than $300.

    Example

    Not a set

    (The impact of the GST is ignored in this example).

    Marie, an employee, buys a range of tools for her tool kit for work - a shifting spanner, a boxed set of screwdrivers and a hammer. Each item costs $300 or less.

    While the tools add to Marie's tool kit, they are not a set. It would make no difference if Marie purchased the items at the same time and from the same supplier or manufacturer. An immediate deduction is available for all the items, including the screwdrivers. The screwdrivers are a set, as they are marketed and used as a set. However as the cost is $300 or less, the deduction is available.

    A group of assets acquired in an income year can be a set even though they also form part of a larger set acquired over more than one income year. If the assets acquired in an income year are a set then the total cost of that set must not exceed $300. If the assets acquired in an income year are not a set then the test does not need to be satisfied.

    Assets acquired in another income year are not taken into account when working out whether items form a set or the total cost of a set.

    Example

    Set of items part of a larger set

    (The impact of the GST is ignored in this example).

    In the 2003-04 income year Paula, a primary schoolteacher, hears about a series of 12 progressive reading books. The books are designed so that pupils move on to the next book only when they have successfully completed the previous book. The first six books are at a basic level where the second six are at an advanced level.

    Paula buys one book a month beginning in January and by 30 June 2004 she holds the first six books (the basic readers) at a total cost of $240. Because of the interdependency of the books, the six books are a set even though they can be purchased individually and they form apart of a larger set. An immediate deduction is available for each book because the cost of the set Paula acquired during the income year was not more than $300.

    If Paula acquires the other six books the advanced readers in the following income year, they would be regarded as a set acquired in that year.

    The concept of a set requires more than one depreciating asset. In some cases, however, more than one item may be a single depreciating asset. An example would be a three volume dictionary. This is a single depreciating asset, not a set of three separate depreciating assets as the three volumes have a single integrated function.

    Last modified: 31 Oct 2005QC 27521