D6 Low-value pool deduction 2025

Things you need to know

To claim a deduction for the decline in value of low-cost and low-value assets, you must:

use the assets in the course of producing assessable income
allocate them to what we call a low-value pool.

Claims for a deduction for the decline in value of other depreciating assets are dealt with at other questions.

Low-cost assets are depreciating assets that cost less than $1,000.

Low-value assets are depreciating assets that:

aren't low-cost assets
on 1 July 2024, have an opening adjustable value of less than $1,000 under the diminishing value method.

You can have only one low-value pool.

Once you choose to allocate a low-cost asset to the low-value pool, you must allocate to the pool all other low-cost assets you start to hold in that year and in future years. Once allocated, those assets must remain in the pool.

However, you can decide whether to allocate low-value assets to the low-value pool on an asset-by-asset basis.

Assets you can allocate to a low-value pool include assets you use either:

in your work as an employee (see questions D1 Work-related car expenses 2025 to D5 Other work-related expenses 2025)
to gain rental income (see question 21 Rent 2025).

However, if you claim the deduction at this question, don't also claim the deduction at questions D1 to D5, or 21.

What you can't claim as a low-value asset

You can't include the following in a low-value pool:

Assets you have previously claimed deductions for using the prime cost method.
Assets that cost $300 or less for which you can claim an immediate deduction.
Assets that you deduct amounts under the simplified depreciation rules for small business entities – for more information, see Business and professional items schedule instructions 2025
Horticultural plants.
Assets that are primarily for use in your employment, if your employer provides it, pays for it or reimburses you for any of its cost, and the benefit is exempt from fringe benefits tax – including
- a portable electronic device (such as a laptop, portable printer, personal digital assistant, calculator, mobile phone and portable GPS navigation receiver)
- computer software
- protective clothing
- a briefcase
- a tool of trade.
Certain assets you use to conduct research and development activities.

If your low-value pool contains only assets used in business, you should lodge your tax return using myTax or a registered tax agent.

If you're unable to use myTax or a registered tax agent, contact us and we'll send you a tax return that includes the Business and professional items schedule 2025.

If you don't allocate assets to a low-value pool in 2024–25 or in a previous year, go to question D7 Interest income deductions 2025.

What you need to answer this question

When you allocate an asset to a low-value pool, you must make a reasonable estimate of the percentage you'll use the asset to produce your assessable income over its effective life (for a low-cost asset) or remaining effective life (for a low-value asset). This estimate is your taxable use percentage for the asset.

You work out your low-value pool deduction using a diminishing value rate. A rate of 37.5% generally applies to the pool balance. However, a rate of 18.75% (that is, half the normal pool rate) applies to the taxable use percentage of:

the cost of each low-cost asset you allocate to the pool in 2024–25
any additional capital costs (such as improvements) you incur in 2024–25 for assets you allocate to the pool in an earlier income year and for low-value assets you allocate to the pool in 2024–25.

For more information, see 'Low-value pools' in the Guide to depreciating assets 2025.

Completing your tax return

To complete this question, follow the steps.

Step 1

Read example 1 and use Worksheet 1 to work out your total low-value pool deduction. Transfer the amount you work out at worksheet 1 – row i to question D6 – label K.

Example 1: using worksheet 1 to work out your low-value pool deduction

Edward buys a printer for $600 in 2024–25. His employer doesn't pay or reimburse any of the cost of the printer. He decides to allocate it to a low-value pool. He estimates that over its effective life the printer will be used 40% of the time to produce his assessable income as an employee.

He works this out as $600 × 40% = $240. Therefore, Edward will write $240 at worksheet 1 – row e.

This is the first year of Edward's low-value pool.

Edward previously claimed deductions under the diminishing value method for a laptop computer he had purchased for $1,500. His employer didn't pay or reimburse any of the cost of the computer. The laptop's opening adjustable value on 1 July 2024 was $900.

Edward estimates that he will use it solely to produce his assessable income for its remaining effective life. Edward allocates the laptop to the pool in 2024–25 as it's now a low-value asset.

Edward's Worksheet 1 would look like this:

Edward's Worksheet 1
Row	Low-value pool deduction	Amount
A	The closing balance of the pool for 2023–24	$0
B	For each low-value asset allocated to the pool in 2024–25, multiply its opening adjustable value (on 1 July 2024) by your taxable use percentage for the asset.	$900
C	Add rows a and b.	$900
D	Multiply row c by 0.375.	$337
E	For each low-cost asset allocated to the pool in 2024–25, multiply its cost (including additional capital costs incurred in 2024–25, such as improvements) by your taxable use percentage for the asset.	$240
f	For each asset allocated to the pool in a prior income year, and low-value asset allocated to the pool in 2024–25 that you incurred additional capital costs (such as improvements) in 2024–25, multiply the costs by your taxable use percentage for the asset.	$0
G	Add rows e and f.	$240
H	Multiply row g by 0.1875.	$45
I	Add rows d and h.	$382

The amount at row i is the total low-value pool deduction. Edward shows $382 at question D6 – label K in his tax return.

End of example

Worksheet 1
Row	Low-value pool deduction	Amount
a	The closing balance of the pool for 2023–24. If you didn't have a low-value pool in 2023–24, write 0 (zero).	$
b	For each low-value asset allocated to the pool in 2024–25, multiply its opening adjustable value (on 1 July 2024) by your taxable use percentage for the asset. Add up the amounts and write in the total.	$
c	Add rows a and b.	$
d	Multiply row c by 0.375.	$
e	For each low-cost asset allocated to the pool in 2024–25, multiply its cost (including additional capital costs incurred in 2024–25, such as improvements) by your taxable use percentage for the asset. Add up the amounts and write in the total.	$
f	For each asset allocated to the pool in a prior income year, and low-value asset allocated to the pool in 2024–25 that you incurred additional capital costs (such as improvements) in 2024–25, multiply the costs by your taxable use percentage for the asset. Add up the amounts and write in the total.	$
g	Add rows e and f.	$
h	Multiply row g by 0.1875.	$
i	Add rows d and h.	$

The amount at row i is the total low-value pool deduction.

Step 2

You'll need the closing pool balance for 2024–25 to calculate your low-value pool deduction for 2025–26. Worksheet 2 will help you work out the closing balance.

Some common events, such as the sale or disposal of an asset in the low-value pool, or the asset's loss or destruction, result in a 'balancing adjustment event'. If there has been a balancing adjustment event for an asset in the pool, you must reduce the closing pool balance. To do this, you multiply the asset's termination value (generally any proceeds, including any insurance payout, from the event) by your taxable use percentage for the asset. Your closing pool balance is reduced by the amount that results from this calculation.

There is space for you to include this amount in worksheet 2. If this amount is more than the closing pool balance, you reduce the closing pool balance to nil and include the excess amount at question 24 Other income in your tax return.

Keep a record of your 2024–25 closing pool balance for next year's tax return.

For more information, see Guide to depreciating assets 2025.

Read example 2, then use Worksheet 2 to work out your closing balance.

Example 2: using worksheet 2 to work out your closing pool balance

Following on from example 1 Edward works out his closing balance, using his worksheet 2:

Edward's Worksheet 2
Row	Closing balance for 2024–25	Amount
j	Transfer amount from worksheet 1 – row a.	$0
k	Transfer amount from worksheet 1 – row b.	$900
l	Transfer amount from worksheet 1 – row e.	$240
m	Transfer amount from worksheet 1 – row f.	$0
n	Add rows j, k, l and m.	$1140
o	Transfer amount from worksheet 1 – row i.	$382
p	Subtract row o from row n.	$758
q	For each pool asset subject to a balancing adjustment event in 2024–25, multiply its termination value by your taxable use percentage for the asset (see Step 2).	$0
r	Subtract row q from row p. This is your closing pool balance for 2024–25.	$758

End of example

Worksheet 2
Row	Closing balance for 2024–25	Amount
j	Transfer amount from worksheet 1 – row a.	$
k	Transfer amount from worksheet 1 – row b.	$
l	Transfer amount from worksheet 1 – row e.	$
m	Transfer amount from worksheet 1 – row f.	$
n	Add rows j, k, l and m.	$
o	Transfer amount from worksheet 1 – row i.	$
p	Subtract row o from row n.	$
q	For each pool asset subject to a balancing adjustment event in 2024–25, multiply its termination value by your taxable use percentage for the asset (see Step 2). Add up the amounts and write the total.	$
r	Subtract row q from row p.	$

The amount at row r is your closing pool balance for 2024–25. You'll need it to calculate your low-value pool deduction for 2025–26.

Where to go next

Go to question D7 Interest income deductions 2025.
Return to main menu Individual tax return instructions 2025.
Go back to question D5 Other work-related expenses 2025.