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  • Plant used partially for producing income



    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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    You may use a depreciable item of plant for more than one purpose. For instance, you may use a computer partially for business and partially for private purposes. In this case, you are allowed only a partial depreciation deduction, based on the percentage for business use.

    Working out your deductions

    If you are using the diminishing value method to work out depreciation deductions for an item of plant used partially for producing income, first work out depreciation in the usual manner by applying the depreciation rate to the opening undeducted cost.

    The depreciation deduction you are allowed is the depreciation reduced by the percentage of non-income-producing use.

    Although you are not allowed a deduction for the percentage of non-income-producing use of the plant, work out the undeducted cost as if there had not been any such use. The examples show you how to work out undeducted costs.

    If you are using the prime cost method, the depreciation deduction allowable is the deduction worked out in the usual way, reduced by the percentage of non-income-producing use of the plant. You are not allowed any further deductions once the undeducted cost of the plant reaches zero.

    Last modified: 13 Feb 2020QC 27380