Items are identical if they are the same in all respects. Items are substantially identical if they are the same in most respects even though there may be some minor or incidental differences. Factors you would consider include colour, shape, function, texture, composition, brand and design.
You do not take into account assets that you acquired in another income year.
Example: Substantially identical items - ignoring any GST impact
Jan buys three kitchen stools for her rental property in the 2006-07 income year. The stools are all wooden and of the same design but they are different colours. The colour of the stools is only a minor difference which is not enough to conclude that the stools are not substantially identical.
The stools cost $150 each. Jan cannot claim an immediate deduction for the cost of each individual stool because they are substantially identical and their total cost exceeds $300.End of example
Example: Not substantially identical items
Jan also buys some chairs for her rental property: a canvas chair for the patio, a high back wooden chair for the bedroom dressing table and a leather executive chair for the study. While these are all chairs, they are not identical or substantially identical. Jan can claim the cost of each of the chairs as an immediate deduction if it is $300 or less.End of example