Show download pdf controls
  • Low-value pooling

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    From 1 July 2000, an optional low-value pooling arrangement for plant has been introduced. It will apply to:

    • low-cost plant-individual items of plant you acquired on or after 1 July 2000 that cost less than $1000 and
    • low undeducted-cost plant-items of plant you held in the previous year of income that you have already (or could have) depreciated using the diminishing value method to an undeducted cost of less than $1000.

    The low-value pool is depreciated using the diminishing value method. Items of plant in the pool have an effective life of 4 years. The pool is depreciated using the following 2 statutory rates:

    • for low-cost plant that has been allocated to the pool for the first time in that income year-18.75 per cent of the total cost of that plant allocated, regardless of when during that year the item was actually acquired. This eliminates the need to calculate a pro-rata depreciation deduction for each item of plant, based on the actual date it was pooled, and
    • for all other plant in the pool (that is, plant that has been allocated to the pool in a previous year and low undeducted-cost plant allocated to the pool in the year of income)-37.5 per cent of the sum of:
      • the pool closing balance from the previous year, and
      • the total undeducted cost of any low undeducted-cost plant allocated to the pool in the year of income.
       

    Once you choose to create a low-value pool and an item of low-cost plant is allocated to the pool, all other low-cost plant acquired in that year and later years must be allocated to the low-value pool.

    For further information about low-value pooling, including the treatment of plant used only partly for income producing activities and the treatment on disposal of plant from a low-value pool, refer to the Guide to Depreciation.

    Last modified: 28 Jul 2003QC 16187