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From 1 July 2000, an optional low-value pooling arrangement for plant was introduced. It applied to certain plant costing less than $1,000 or having an undeducted cost of less than $1,000. Such plant could be allocated to a low-value pool and depreciated at statutory rates.
The UCA adopts most of the former rules for a low-value pool. From 1 July 2001, the decline in value of certain depreciating assets can be worked out through a low-value pool.
Transitional rules apply so that a low-value pool created before 1 July 2001 continues and is treated as if it were created under the UCA. The closing balance of the pool worked out under the former rules is used to start working out the decline in value of the depreciating assets in the pool under the UCA rules.
Under the UCA, you can allocate low-cost assets and low-value assets to a low-value pool.
A low-cost asset is a depreciating asset whose cost is less than $1,000 (after GST credits or adjustments) as at the end of the income year in which you started to use it, or had it installed ready for use, for a taxable purpose.
A low-value asset is a depreciating asset:
- that is not a low-cost asset
- that has an opening adjustable value for the current year of less than $1,000, and
- for which you used the diminishing value method to work out any deductions for decline in value for a previous income year.
The decline in value of an asset you hold jointly with others is worked out on the cost of your interest in the asset. This means if you hold an asset jointly and the cost of your interest in the asset or the opening adjustable value of your interest is less than $1,000, you can allocate your interest in the asset to your low-value pool - see Jointly held depreciating assets.
The following depreciating assets cannot be allocated to a low-value pool:
Last modified: 18 Jul 2006QC 27742