• How do you work out your deduction for pooled assets?

    The deduction for the decline in value of depreciating assets in a low-value pool is worked out using a diminishing value rate of 37.5%. This rate is based on an effective life of four years.

    For the income year in which you first allocate a low-cost asset to the pool, your deduction is worked out at a rate of 18.75%, or half the pool rate. Halving the rate recognises that assets may be allocated to the pool throughout the income year and eliminates the need to make separate calculations for each asset based on the date it was allocated to the pool.

    To work out the decline in value of the depreciating assets in a low-value pool, add:

    • 18.75% of both
      • the taxable use percentage of the cost of low-cost assets you allocated to the pool during the year
      • the taxable use percentage of the cost of any improvements you made during the year to the assets in the pool.
       
    • 37.5% of both:
      • the closing pool balance for the previous year
      • the taxable use percentage of the opening adjustable values of any low-value assets allocated to the pool during the year.
       

    Example 2 

    Using the facts of the previous example, assume that at the end of 2000-01 John has a low-value pool with a closing balance of $5,000. John's deduction for the assets in the pool for 2001-02 is:

    18.75% of the taxable use percentage of the cost of the printer allocated to the pool during the year (18.75% of $594)

    $111

    37.5% of the closing pool balance for the previous year (37.5% of $5,000)

    $1,875

    Total

    $1,986

     

    End of example
      Last modified: 15 Apr 2016QC 16455