Draft Taxation Determination

TD 93/D113

Income tax: if a purchase of depreciable plant comprises individual items costing $300 or less each or have an effective life of less than 3 years, can these individual items be depreciated at the rate of 100% in terms of subsection 55(2) of the Income Tax Assessment Act 1936 ?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 93/159.

FOI status:

draft only - for comment


Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes. Provided that the item costing $300 or less or having an effective life of less than 3 years :

is regarded as a whole,
is capable of being separately identified, and
has a separate function,

the item will be depreciated at the rate of 100% under subsection 55(2), if the taxpayer does not nominate a lower rate in terms of subsection 55(8).

2. The 100% depreciation rate only applies to depreciable plant acquired on or after 1 July 1991. Depreciation at the 100% rate is deductible in the year of income in which the depreciable plant is first used by the taxpayer for the purpose of producing assessable income or is installed ready for use for that purpose.


A taxpayer purchases 20 chairs at $250 each during the 1991-1992 income year which are used for the purpose of producing assessable income. Each chair satisfies the requirements set out in paragraph 1 above. Unless the taxpayer nominates a lower rate, the depreciation deduction allowable in the 1991-1992 income year is:

20 * $250 = $5000

Commissioner of Taxation
13 May 1993



ISSN 1038-8982

Related Rulings/Determinations:

IT 2142
IT 2685

Subject References:
depreciable assets

Legislative References:
ITAA 55(2)
ITAA 55(8)