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  • Who can depreciate plant?



    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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    Only owners or quasi-owners can depreciate plant. You will be treated as the owner of the plant for depreciation purposes if you are the legal owner or you hold sufficient rights over the plant to characterise you as the owner in preference to any other person who also holds rights over the plant.

    Quasi-ownership covers the situation where plant is attached to land that you do not own but have a right to use. This only applies where the land is owned by certain Australian and foreign government agencies. An example of quasi-ownership is where you have a Crown lease and have attached plant to that land after you acquired the lease.

    Quasi-ownership also applies to plant which you have leased to a lessee and which has become a fixture on land that you do not own, provided certain conditions are met.

    If there is a quasi-owner, only the quasi-owner can claim depreciation. If you are not sure whether you are the owner of the plant, contact your professional tax adviser or ring the ATO.

    Luxury cars leased after 20 August 1996

    Lessees of luxury cars, either new or second hand, which cost more than the depreciation cost limits given in the table ($55,134 for the current income year) are subject to luxury car leasing rules. These rules apply to leases entered into after 20 August 1996, other than for short-term hiring agreements or for cars that are trading stock of the lessee.

    Under these rules the lessee is treated as the owner of the luxury car. The actual lease payments made by the lessee are no longer allowable deductions. The lease payments are divided into their underlying capital component and their finance charge component. The lessee can then claim:

    • the finance charge component reduced to reflect non-business use and
    • depreciation based on the luxury car depreciation limit reduced to reflect non-business use.
    Last modified: 13 Feb 2020QC 27380