• What if you dispose of a pooled depreciating asset?

    If you dispose of a pooled asset during an income year you must reduce the closing pool balance for that year by the taxable use percentage of the asset's termination value (for example, any proceeds from the disposal). If this percentage of termination value exceeds the closing pool balance, the excess is included in your assessable income.

    When an asset that was used only partly for a taxable purpose is disposed of, a capital gain or loss may arise. Where there is a difference between the asset's cost and its termination value, the proportion of this difference that is attributable to the estimated non-taxable use of the asset is treated as a capital gain or loss under the capital gains provisions.

    Example 3 

    Following on from the first example, during 2002-03, John sells the printer for $500. Because he originally estimated that the printer would only be used 60% for taxable purposes, the closing balance of the pool is reduced by 60% of the termination value, that is:

    60% x $500 = $300

    A capital loss of $196 also arises. As the printer's taxable use percentage is 60%, 40% of the difference between the asset's cost and its termination value is treated as a capital loss, that is:

    40% x ($500 less $990) = $196 capital loss

    End of example
      Last modified: 15 Apr 2016QC 16455