Deduction for decline in value of depreciating assets (previously known as depreciation)



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From 1 July 2001, the uniform capital allowance system (UCA) applies to most depreciating assets, including those acquired before that date. The UCA consolidates a range of former capital allowance provisions, including those relating to plant and equipment. It does this by providing a set of general rules that applies across a variety of depreciating assets and certain other capital expenditure. It maintains some concessional tax treatments such as those applying to primary production capital expenditure and primary production depreciating assets and also introduces new deductions for certain types of capital expenditure that did not previously attract a deduction.

You now calculate deductions for the decline in value of your depreciating assets using these new rules. You can deduct an amount equal to the decline in value for an income year of a depreciating asset that you held at any time during that year. However, your deduction is reduced to the extent you use it or have it installed ready for use for other than the purpose of producing assessable income-for example, a private purpose.

Last modified: 18 Jul 2008QC 16578