Depreciating
Assets - Recent ATO Changes
On 20 June 2002 the Tax Office announced new effective
lives for a range of depreciating assets.
These
new effective lives are part of a comprehensive review
being conducted by the Commissioner of Taxation of his
"safe harbour" depreciation schedule.
The
effective life of a depreciating asset is used to work
out the deduction available for the asset under the capital
allowances provisions.
New effective lives include:
The
reviews have been conducted in close consultation with
industry to ensure the determinations accurately reflect
the effective lives of assets specific to each industry
sector.
The
changes, which took effect from 1 July 2002, only affect
assets acquired after that date.
The
way the Tax Office works out the effective life of an
asset is set out in Taxation Ruling TR 2000/18 which can
be found on the ATO website (refer to our Links page),
or you can contact your Accountant at Perry Ure for more
information.
New effective life of cars:
The
effective life of cars has been increased from 6 2/3 years
to 8 years. The last review was in 1936.
