The decline in value of certain depreciating assets costing $300 or less is their cost. This means you get an immediate deduction for the cost of the asset to the extent that you used it for a taxable purpose during the income year in which the deduction is available.
The immediate deduction is available if all of the following tests are met in relation to the asset:
- it cost $300 or less - see Cost is $300 or less
- you used it mainly for the purpose of producing assessable income that is not income from carrying on a business - see Used mainly to produce non-business assessable income
- it was not part of a set of assets you start to hold in the income year that cost more than $300 - see Not part of a set, and
- it was not one of a number of identical or substantially identical assets you start to hold in the income year that together cost more than $300 - see Not one of a number of identical or substantially identical items.
If you are not eligible to claim the immediate deduction, you work out the decline in value of the asset using the general rules for working out decline in value. Alternatively, you may be able to allocate the asset to a low-value pool - see Low-value pools.
The immediate deduction is not available for the following depreciating assets:
- certain water facilities and horticultural plants (including grapevines ) - see Primary production depreciating assets
- certain depreciating assets of primary producers, other landholders and rural land irrigation water providers used in landcare operations - see Landcare operations
- certain depreciating assets of primary producers and other landholders used for electricity connections or phone lines - see Electricity connections and phone lines, or
- in-house software if you have allocated expenditure on it to a software development pool - see Software development pools.