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.