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You can claim an immediate deduction for a depreciating asset costing $300 or less if you use the asset predominantly to produce assessable income that is not from carrying on a business-including rental income.
If the asset was acquired on or after 1 July 2001, there are two additional tests that must be met before an immediate deduction can be claimed:
- the asset must not be one that is part of a set of assets that you started to acquire in the same income year where the total cost of the set is more than $300; and
- the total cost of the asset and any other identical, or substantially identical, asset that you start to acquire in an income year must not be more than $300.
In November 2001, Terry purchased a toaster for his rental property at the cost of $70. He can claim an immediate deduction as he uses the toaster to produce assessable income, but not from carrying on a business.
No immediate deduction
Paula is buying a set of four identical bedside drawers for her rental property that cost $90 each. She cannot claim an immediate deduction for any of these because they are identical and the total cost is more than $300.
Last modified: 18 Jul 2008QC 16578