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Not part of a set

Last updated 7 April 2020

Whether items form a set needs to be determined on a case by case basis. Items may be regarded as a set if they are:

  • dependent on each other
  • marketed as a set, or
  • designed and intended to be used together.

It is the cost of a set of assets you acquire in the income year that must not exceed $300. You cannot avoid the test by buying parts of a set separately.

Example: Not a set - ignoring any GST impact

Marie, an employee, buys a range of tools for her tool kit for work - a shifting spanner, a boxed set of screwdrivers and a hammer. Each item costs $300 or less. While the tools add to Marie's tool kit, they are not a set. It would make no difference if Marie purchased the items at the same time and from the same supplier or manufacturer. An immediate deduction is available for all the items, including the screwdrivers. The screwdrivers are a set, as they are marketed and used as a set. However, as the cost is $300 or less, the deduction is available.

A group of assets acquired in an income year can be a set in themselves even though they also form part of a larger set acquired over more than one income year. If the assets acquired in an income year are a set then the total cost of that set must not exceed $300. Assets acquired in another income year that form part of a larger set are not taken into account when working out whether items form a set or the total cost of a set.

Example: Set of items part of a larger set - ignoring any GST impact

In the 2004-05 income year, Paula, a primary school teacher, hears about a series of 12 progressive reading books. The books are designed so that pupils move on to the next book only when they have successfully completed the previous book. The first six books are at a basic level while the second six are at an advanced level.

Paula buys one book a month beginning in January and by 30 June 2005 she holds the first six books (the basic readers) at a total cost of $240. Because of the interdependency of the books, the six books are a set even though they can be purchased individually and they form part of a larger set. An immediate deduction is available for each book because the cost of the set Paula acquired during the income year was not more than $300.

If Paula acquires the other six books (the advanced readers) in the following income year, they would be regarded as a set acquired in that year.

The concept of a set requires more than one depreciating asset. In some cases, however, more than one item may be a single depreciating asset. An example would be a three-volume dictionary. This is a single depreciating asset, not a set of three separate depreciating assets as the three volumes have a single integrated function.