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  • Commissioner's determination



    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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    In making his determination, the Commissioner assumes that the depreciating asset is new and has regard to general industry circumstances of use.

    As a general rule, use the Taxation Ruling or version of the Taxation Ruling schedule that is in force at the time you first use it, or have it installed ready for use. This will usually be when you:

    • enter into a contract to acquire and asset
    • otherwise acquire it, or
    • start to construct it.

    However, if the asset's start time does not occur within five years of this time, you must use the effective life that is in force at the asset's start time. For an item of plant acquired under a contract entered into, otherwise acquired or started to be constructed before 11.45am (by legal time in the ACT) on 21 September 1999, there is no restriction on the period within which the plant must be used. The general rule in the previous paragraph applies to such plant.

    The latest Taxation Ruling is Taxation Ruling TR 2007/3 Income tax: effective life of depreciating assets (applicable from 1 July 2007), which lists the Commissioner's determinations of the effective life for various depreciating assets.

    You need to work out which of the following apply:

    As a general rule, the table of effective lives accompanying Taxation Ruling IT 2685 should be used only for depreciating assets:

    • acquired under a contract entered into
    • otherwise acquired, or
    • started to be constructed

    before 1 January 2001.

    Note: Taxation Ruling IT 2685 contains depreciation rates – accelerated rates and broadbanded rates – which you should use only for plant that was acquired before 11.45am (by legal time in the ACT) on 21 September 1999 or by certain small business taxpayers before 1 July 2001 – see Accelerated depreciation.

    For an extract from Taxation Ruling TR 2007/3 showing the effective lives of some commonly used depreciating assets, see Examples of effective lives – from Taxation Ruling TR 2007/3 as at 1 July 2007.

    Last modified: 14 Jul 2020QC 27915