From 1 July 2001, deductions for the decline in value of most depreciating assets, including those acquired before that date, are worked out under the UCA rules.
The UCA contains general rules for working out the decline in value of a depreciating asset and those rules are covered in this part of the guide. Transitional rules apply to depreciating assets held before 1 July 2001 so their decline in value can be worked out using these rules see Depreciating assets held before 1 July 2001.
The general rules do not apply to some depreciating assets. For these assets, the UCA provides specific rules for working out deductions, for example:
- there is an immediate deduction for certain depreciating assets which cost $300 or less that are used mainly to produce non-business assessable income see Immediate deduction for certain non-business depreciating assets costing $300 or less
- the decline in value of certain depreciating assets that cost or are written down to less than $1,000 can be worked out through a low-value pool see Low-value pools
- in-house software for which expenditure has been allocated to a software development pool see Software development pools
- for depreciating assets used in exploration or prospecting, in certain circumstances, the decline in value is the asset's cost see Mining and quarrying and minerals transport
- 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.
There are specific rules for working out deductions for depreciating assets used in carrying on research and development activities-see the Research and development tax concession schedule and instructions for more information.