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  • About this guide



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

    End of attention

    As a general rule, you can claim deductions for expenses you incurred in gaining or producing your income – for example, in carrying on a business – but some expenditure, such as the cost of acquiring capital assets, is generally not deductible. However, you may be able to claim a deduction for the decline in value of the cost of capital assets used in gaining assessable income.

    The Guide to depreciating assets 2008 explains:

    • how to work out the decline in value of your depreciating assets
    • what happens when you dispose of or stop using a depreciating asset, and
    • the deductions you may be able to claim under the uniform capital allowance system (UCA) for capital expenditure other than on depreciating assets.

    Who should use this guide?

    Use this guide if you bought capital assets to use in gaining or producing your assessable income and you would like to claim a deduction for the assets' decline in value. Also use this guide if you incurred other capital expenditure and want to know whether you can claim a deduction for the expenditure.

    Small business entities

    For the 2007–08 and later income years, new streamlined provisions for small business entities have replaced the simplified tax system (STS). Broadly, to use the simplified taxation rules a small business entity must carry on business and have an aggregated turnover of less than $2 million. For more information, see Small business entities.

    Publications and services

    To find out how to get a publication referred to in this guide and for information about our other services, see More information.

    Unfamiliar terms

    For an explanation of any unfamiliar terms used throughout this guide, see Definitions. They are shown in bold when first used.

    Last modified: 14 Jul 2020QC 27915