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  • Immediate deduction for plant costing $300 or less or with an effective life of less than 3 years

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    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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    Plant costing $300 or less acquired after 1 July 2000

    The situation at the time of publication of this book is that for all taxpayers other than small business taxpayers, the immediate deduction for plant costing $300 or less has been repealed and replaced with an option to depreciate plant through a low-value pool. Further details are now available from the booklet How to claim plant costing $300 or less (NAT4582-7.2001).

    However, the New Business Tax System (Capital Allowances) Bill 2000 Exposure Draft contains a proposal to reinstate the immediate write-off for plant costing $300 or less for certain taxpayers who use the plant predominantly to produce assessable income that is not derived from carrying on a business in the 2001 income year.

    The immediate deduction will be available to the owners and quasi-owners of plant who are either small business taxpayers or other taxpayers who satisfy all of the following requirements:

    • the plant is used predominantly for the purpose of producing assessable income that is not derived from carrying on a business
    • the plant is not part of a set of items acquired in the same year and costing more than $300 in total, and
    • the plant is not one of a number of identical or substantially identical items acquired in the same year and costing more than $300 in total.

    Plant with an effective life of less than 3 years

    Except for small business taxpayers with access to accelerated rates of depreciation, the immediate deduction for plant with an effective life of less than 3 years is no longer available if:

    • you became its owner or quasi-owner under a contract entered into after 11.45 a.m. (by legal time in the ACT) on 21 September 1999, or
    • you constructed it and the construction started after this time, or
    • you acquired it in some other way after this time.

    The calculation of the depreciation deduction for these items of plant is based solely on the effective life of the plant.

    Last modified: 07 Jan 2005QC 27380