The decline in value of certain depreciating assets costing $300 or less (after GST credits or adjustments) is their cost. This means you get an immediate deduction for the cost of the asset to the extent that you use it for a taxable purpose during the income year in which the deduction is available.
The immediate deduction is available if all of the following tests are met in relation to the asset:
- it costs $300 or less see The cost of a depreciating asset to work out the cost of your asset
- it is used mainly for the purpose of producing assessable income that is not income from carrying on a business
- it is not part of a set of assets you start to hold in the income year that costs more than $300
- it is not one of a number of identical or substantially identical assets you start to hold in the income year that together cost more than $300.
If you are not eligible to claim the immediate deduction, you work out the decline in value of the asset using the general rules for working out decline in value. Alternatively, you may be able to allocate the asset to a low-value pool see Low-value pools.
The immediate deduction is not available for the following depreciating assets:
- water facilities, horticultural plants and grapevines used in a primary production business see Primary production depreciating assets
- certain depreciating assets of primary producers and other landholders used in landcare operations, electricity connections or telephone lines see Capital expenditure of primary producers and other landholders
- in-house software if you have allocated expenditure on it to a software development pool see Software development pools.