| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051612039449
Date of advice: 2 December 2019
Ruling
Subject: Small business pool
Question
Can the value of the asset be reduced for its decline in value until you start using it in your business, then added to a general small business pool and written off at the end of the financial year if the pool balance is less than $30,000?
Answer
Yes.
As a small business entity you can choose to use a general small business pool to deduct amounts for your depreciating assets (section 328-185 of the Income Tax Assessment Act 1997 (ITAA 1997).
You allocate the taxable purpose proportion of the adjustable value of the depreciating asset to the pool. The adjustable value of the depreciating asset at the time it is included in the pool is its cost less its decline in value up to that time.
Where the pool balance is less than $30,000 at the end of the 20XX-XX income year, a deduction can be claimed for the balance, that is, it can be written off (section 328-210 of the ITAA 1997).
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You purchased an asset in 20XX for less than $20,000.
Since then you still worked as a full time employee up until the start of the 20XX-XX financial year when you commenced your business.
After that you used the asset solely for your business.
You are a small business entity.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 328-185
Income Tax Assessment Act 1997 Section 328-210
Income Tax Assessment Act 1997 Section 40-85