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  • Which items can you depreciate?



    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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    The depreciation provisions apply to plant that is used to produce assessable income or is installed ready for use to produce assessable income and is held in reserve. Plant includes:

    • computers
    • electric tools
    • furniture and fittings
    • furnishings-carpets and curtains
    • manufacturing machinery
    • motor vehicles.

    In some situations, various other assets which are generally not regarded as plant are also depreciable under income tax. They include:

    • working animals-for example, racehorses-not used in primary production
    • structural improvements-for example, fences and dams-on land used in primary production and forest operations
    • plumbing fixtures and fittings in premises principally for the use of employees or for the care of the children of employees
    • software, including a licence to use it.

    Buildings are not generally plant or included in plant but a deduction similar to depreciation may be available under the separate deduction provisions for capital works.

    In most instances, it will be clear whether or not something is an item of plant. However, if you are not sure whether an item qualifies for depreciation, contact your professional tax adviser or ring the ATO.

    Which items can't you depreciate?

    There are a few items of plant on which you cannot claim depreciation. They are:

    • plant where a deduction is available under the provisions for specific landcare operations or facilities to conserve or convey water
    • research and development plant unless you have elected that the research and development provisions are not to apply to that plant
    • leisure facilities and boats unless, at some time in the income year, their use constitutes a fringe benefit or you used them for certain specific business purposes.
    Last modified: 13 Feb 2020QC 27380