Immediate deductions
When depreciating your assets it is worth considering whether they cost $300 or less. If the asset is $300 or less, and the asset purchased was for a taxable purpose, you may get an immediate deduction for the cost of that asset. Four criteria must be met to make this deduction:
- The asset must cost $300 or less
- You must have used the asset for producing assessable income that was not income from carrying on a business
- The asset cannot be part of a set of assets totalling more than $300
- The asset cannot be one of a number of identical assets totalling more than $300.
You may also be eligible for this immediate deduction if you held an interest in an asset purchased in the income tax year, and your interest in this asset was less than $300.
For example, if you jointly held a $500 asset with another party, of which you paid 50 per cent – that is $250, you would be able to make an immediate deduction for the $250 providing the tests outlined above were satisfied.
Please contact your Chartered Accountant if you wish to discuss the deduction of assets further.