Use Appendix 6 to help you with uniform capital allowances.
UCA topics covered in appendix
This appendix covers the following uniform capital allowance (UCA) topics:
- balancing adjustment amounts
- deduction for decline in value of depreciating assets
- deduction for environmental protection expenses
- deduction for project pool
- electricity connections and phone lines
- grapevines and horticultural plants
- hire-purchase agreements
- landcare operations and deductions for decline in value of a water facility, fencing asset and fodder storage asset
- limited recourse debt
- loss on the sale of a depreciating asset
- low-value pools
- luxury car leases
- profit on the sale of a depreciating asset
- section 40-880 deduction
- temporary full expensing
- the TOFA rules and UCA.
For more information on any of these topics, see the Guide to depreciating assets 2022.
Eligible small business entities that choose to use the simplified depreciation rules calculate deductions for most of their depreciating assets under the specific small business entity depreciation rules.
Passenger vehicles
A car limit applies to any sized business that purchases a passenger vehicle (except a motorcycle or similar vehicle) designed to carry a load of less than one tonne and fewer than 9 passengers. You must reduce the cost of the vehicle to the car limit before calculating your depreciation. You can't claim the excess cost of the vehicle above the car limit under any other depreciation rules.
The car limit for 2021–22 is $60,733.
For more information, see Car limit.
Balancing adjustment amounts
If the partnership ceases to hold or to use a depreciating asset, a balancing adjustment event may occur. For assets subject to the small business entity depreciation rules, see Step 4 Disposal of depreciating assets. For assets not subject to these rules, the partnership will need to calculate a balancing adjustment amount to include in its assessable income or to claim as a deduction.
Show an assessable balancing adjustment amount as an income add back at item 5 – label A Income reconciliation adjustments.
Show a deductible balancing adjustment amount as an expense subtraction at item 5 – label B Expense reconciliation adjustments.
If the asset was used for both taxable and non-taxable purposes, reduce the balancing adjustment amount by the amount attributable to the non-taxable use. A capital gain or capital loss may arise which is attributable to that non-taxable use.
Show any profit or loss on the sale of a depreciating asset that has been included in the accounts of the partnership as either an income subtraction at item 5 – label A Income reconciliation adjustments or an expense add back at item 5 – label B Expense reconciliation adjustments.
See Profit on the sale of a depreciating asset and Loss on the sale of a depreciating asset.
If you have elected to use the hedging tax-timing method provided for in the TOFA rules and you have a gain or loss from a hedging financial arrangement used to hedge risks for a depreciating asset, work out the gain or loss allocated under the TOFA rules and show the amount at label A Income reconciliation adjustments or label B Expense reconciliation adjustments when calculating the depreciating asset’s balancing adjustment amount.
Also include the gain or loss on the hedging financial arrangement at item 31 Taxation of financial arrangements (TOFA).
For more information, see Guide to the taxation of financial arrangements (TOFA) and Guide to depreciating assets 2022.
If a balancing adjustment event occurred to a depreciating asset of the partnership during the income year, you may need to include an amount at item 49 Capital allowances – label H or I.
Deduction for decline in value of depreciating assets
For assets subject to the small business entity depreciation rules, see Calculating depreciation deductions for small business entities. For assets not subject to the small business entity depreciation rules, the decline in value is generally worked out using either the prime cost or diminishing value method. Both methods are based on the effective life of an asset. For most depreciating assets, the partnership can choose whether to self-assess the effective life or to adopt the Commissioner’s determination in TR 2021/3 Income tax: effective life of depreciating assets (applicable from 1 July 2021).
The partnership can deduct an amount equal to the decline in value of a depreciating asset for the period that it holds the asset during the income year. However, the deduction is reduced to the extent the asset is used, or installed ready for use, for other than a taxable purpose.
If you have elected to use the hedging tax-timing method provided for in the TOFA rules and you have a gain or loss from a hedging financial arrangement used to hedge risks for a depreciating asset, then the amounts shown at label A Income reconciliation adjustments and label B Expense reconciliation adjustments will also need to take into account the effect of that gain or loss from the hedging financial arrangement.
Also include the gain or loss on the hedging financial arrangement at item 31 Taxation of financial arrangements (TOFA).
An immediate deduction is available for a depreciating asset costing $300 or less (but only to the extent the asset is used for a taxable purpose) if the asset satisfies all of the following requirements:
- It is used predominantly for the purpose of producing assessable income that is not income from carrying on a business.
- It is not part of a set of assets acquired in the same income year that costs more than $300.
- It is not one of any number of identical or substantially identical items acquired in the same income year that together cost more than $300.
You can allocate certain assets that cost less than $1,000 or that have an opening adjustable value of less than $1,000 to a low-value pool to calculate the decline in value. You can't allocate assets eligible for the immediate deduction to a low-value pool.
If the partnership is not using the small business entity depreciation rules, show the deduction for decline in value of depreciating assets used in carrying on a business as an expense subtraction at item 5 – label B Expense reconciliation adjustments.
This amount is often different from the amount of depreciation calculated for accounting purposes shown at item 5 – label K, so you will need to include the amount at label K as an expense add back at item 5 – label B Expense reconciliation adjustments.
Show deductions for the decline in value of depreciating assets used to earn rental income, earn interest or dividends, or used by the partnership in the management of its tax affairs at item 9 Rent – label H, item 16 Deductions relating to Australian investment income or item 18 Other deductions, respectively.
For more information on where to show deductions for depreciating assets in a low-value pool, see Low-value pools.
A partnership can't claim a deduction for the decline in value of certain depreciating assets; instead, the individual partners are usually entitled to claim a deduction.
For more information, see:
- Electricity connections and phone lines
- Grapevines and horticultural plants
- Landcare operations and decline in value of a water facility, fencing asset and fodder storage asset.
To calculate the deduction for the decline in value of most depreciating assets, use worksheet 1 and worksheet 2 in the Guide to depreciating assets 2022.
You can also work out your depreciation and capital allowance claims by using the Depreciation and capital allowances tool.
Deduction for environmental protection expenses
The partnership can deduct expenditure incurred for the sole or dominant purpose of carrying on environmental protection activities (EPA). EPA are activities undertaken to prevent, fight or remedy pollution or to treat, clean up, remove or store waste from the partnership’s earning activity. The earning activity is one the partnership has carried on, carries on, or proposes to carry on for the purpose of:
- producing assessable income (other than a net capital gain)
- exploration or prospecting
- mining site rehabilitation.
The partnership may claim a deduction for cleaning up a site on which a predecessor carried on substantially the same business activity.
The deduction is not available for:
- EPA bonds and security deposits
- expenditure for acquiring land
- expenditure for constructing or altering buildings, structures or structural improvements
- expenditure to the extent that the partnership can deduct an amount for it under another provision.
Expenditure which forms part of the cost of a depreciating asset is not expenditure on EPA.
You can write off expenditure incurred on or after 19 August 1992 on certain earthworks constructed as a result of carrying out EPA at the rate of 2.5% per annum under the provisions for capital works expenditure.
You can't claim a deduction for expenditure on an environmental assessment of a project of the partnership as expenditure on EPA. If it is capital expenditure directly connected with a project, it could be a project amount for which a deduction would be available over the project life; see Deduction for project pool.
If the deduction arises from a non-arm’s length transaction and the expenditure is more than the market value of what it was for, the amount of the expenditure is instead taken to be that market value.
Include any recoupment of the expenditure as assessable income at item 5 – label G or label H Other business income, or as an income add back at item 5 – label A Income reconciliation adjustments.
Include the deduction for environmental protection expenses at item 5 – label N or as an expense subtraction at item 5 – label B Expense reconciliation adjustments.
Foreign exchange gains and losses
If you purchased a depreciating asset in foreign currency, the first element of the asset’s cost is converted to Australian currency. From 1 July 2003, if the foreign currency amount became due for payment within the 24-month period that began 12 months before the time when you began to hold the depreciating asset, any realised foreign exchange gain or loss (referred to as a forex realisation gain or a forex realisation loss) can modify the asset’s cost, opening adjustable value, or the opening balance of your low-value pool, as applicable.
However, if the foreign currency amount relates to the second element of the cost of a depreciating asset, the translation to Australian currency is made at the exchange rate applicable at the time you incurred the relevant expenditure, and a 12 month rule instead of a 24 month rule applies. The 12 month rule requires that the foreign currency became due for payment within 12 months after the time you incurred the relevant expenditure. In some circumstances, you may be able to elect that forex gains and losses do not modify the asset’s cost, opening adjustable value or the opening balance of your low-value pool.
For more information, see Election out of the 12 month rule.
Deduction for project pool
You can allocate certain capital expenditure incurred after 30 June 2001 directly connected with a project that is carried on, or proposed to be carried on, for a taxable purpose to a project pool and write it off over the project life.
A project is carried on if it involves a continuity of activity and active participation. Merely holding a passive investment, such as a rental property, would not be regarded as carrying on a project.
The capital expenditure, known as a project amount, must be expenditure incurred:
- to create or upgrade community infrastructure for a community associated with the project; this expenditure must be paid, not just incurred, to be a project amount
- for site preparation for depreciating assets (other than in draining swamp or low-lying land or in clearing land for horticultural plants including grapevines)
- for feasibility studies for the project
- for environmental assessments for the project
- to obtain information associated with the project
- in seeking to obtain a right to intellectual property
- for ornamental trees or shrubs.
Project amounts include mining capital expenditure and transport capital expenditure.
The expenditure must not otherwise be deductible or form part of the cost of a depreciating asset.
If the expenditure incurred arises from a non-arm’s length dealing and is more than the market value of what it was for, the amount of the expenditure is taken to be that market value.
The deduction for project amounts allocated to a project pool commences when the project starts to operate.
If your project pool contains only project amounts incurred on or after 10 May 2006 and the project starts to operate on or after that date, your deduction is calculated as follows:
Certain projects may be taken to have started to operate before 10 May 2006, for example, if a project is abandoned and then restarted on or after 10 May 2006 just so deductions can be calculated using the above formula.
For other project pools, the deduction is calculated using the following formula:
The DV project pool life is the project life or, if that life has been recalculated, the most recently recalculated project life. Determine the project life by estimating how long (in years and fractions of years) it will be from when the project starts to operate until it stops operating. Generally, a project starts to operate when the activities that will produce assessable income start. The project life is estimated from the perspective of the partnership, but the event used to determine when the project will stop operating must be something outside its control.
The pool value for an income year is broadly the sum of the project amounts allocated to the pool up to the end of that year, minus the sum of the deductions claimed for the project pool in previous years or that which could have been claimed had the project operated wholly for a taxable purpose.
The pool value can be subject to adjustments.
If there is an entitlement to an input tax credit (GST) for expenditure allocated to a project pool, reduce the pool value by the amount of the credit. You will need to adjust the pool value for certain increasing or decreasing adjustments for expenditure allocated to a project pool.
The pool value can be subject to adjustment under the foreign exchange (forex) provisions. A relevant forex gain or loss may arise if, during an income year beginning on or after 1 July 2003, the partnership ceased to have an obligation to pay foreign currency where the obligation was incurred as a project amount allocated to a project pool. If the amount was incurred after 30 June 2003 (or earlier, if so elected) and became due for payment within 12 months after it was incurred, then the pool value for the income year in which the amount was incurred is increased by any forex loss, and decreased by any forex gain. If the forex gain exceeds the pool value, reduce the pool value to zero, and the excess gain is assessable. This is known as ‘the 12 month rule’. In limited circumstances, a partnership may elect out of the 12 month rule. For more information, see Election out of the 12 month rule. If it has been elected that the 12 month rule should not apply, any forex gain will be assessable and any forex realisation loss will be deductible in accordance with the forex measures. For more information on the forex measures, see Foreign exchange gains and losses.
The deduction for project amounts allocated to a project pool can't be more than the amount of the pool value for that income year.
There is no need to apportion the deductions if the project starts to operate during the income year for project amounts incurred during the year. However, the deduction is reduced by the extent to which the project is operated for a non-taxable purpose during the income year.
If the project is abandoned, sold or otherwise disposed of, you can claim a deduction for the sum of the closing pool value of the prior income year (if any) plus any project amounts allocated to the pool during the income year, after allowing for any necessary pool value adjustments. A project is abandoned if it stops operating and will not operate again.
Any amount received for the abandonment, sale or other disposal of a project is assessable income.
If an amount of capital expenditure allocated to a project pool is recouped, or if a capital amount is derived for a project amount or something on which a project amount was expended, include the amount in assessable income.
If any receipt arises from a non-arm’s length dealing and the amount is less than the market value of what it was for, the amount received is taken to be that market value.
Include any deduction for a project pool as an expense subtraction at item 5 – label B Expense reconciliation adjustments. You must show the deduction at item 49 Capital allowances – label J.
The partnership must add back any capital expenditure allocated to the pool that has been included as an expense at item 5. Show the amount as an expense add back at item 5 – label B Expense reconciliation adjustments.
Include assessable income at item 5 – label G or H Other business income or as an income add back at item 5 – label A Income reconciliation adjustments.
Electricity connections and phone lines
You may be able to claim a deduction over 10 years for capital expenditure on:
- mains electricity – connecting, upgrading or extending a connection to any land on which a business is carried on
- telephone lines – connecting or extending to land on which only a primary production business is carried on.
In the case of partnerships, deductions for this expenditure are not claimed by the partnership (unlike partnership assets depreciated under the general depreciation rules), but are allocated to each partner who can then claim for their share of the expenditure.
If your expenditure on mains electricity or phone lines (along with similar works such as broadband telecommunications links) doesn't meet the conditions, you may be able to write it off as a capital works deduction.
The partnership must add back any such capital expenditure included as an expense at item 5. Show the amount as an expense add back at item 5 – label B Expense reconciliation adjustments.
Grapevines and horticultural plants
Your deduction for the decline in value of grapevines is based on the capital expenditure incurred in establishing the grapevines (and horticultural plants). Capital expenditure incurred in establishing grapevines does not include the costs of:
- purchasing or leasing land
- draining swamps or low-lying land
- clearing land.
However, it would include, for example, the costs of:
- preparing the land – ploughing, contouring, fertilising, stone removal and topsoil enhancement
- planting the vines
- the vines.
Expenditure on establishing grapevines and horticultural plants incurred by a partnership is allocated to each partner, and the relevant deduction is available to them. It is not available in calculating the net income or loss of a partnership.
The partnership must add back any such capital expenditure included as an expense at item 5. Show the amount as an expense add back at item 5 – label B Expense reconciliation adjustments.
Hire-purchase agreements
Hire-purchase and instalment-sale agreements of goods are treated as a sale of the property by the financier (or hire-purchase company) to the hirer (or instalment purchaser).
The sale is treated as being financed by a loan from the financier to the hirer at a sale price of either their agreed cost or the arm’s length value of the property. The periodic hire-purchase (or instalment) payments are treated as payments of principal and interest under the notional loan. The hirer can claim a deduction for the interest component, subject to any reduction required under the thin capitalisation rules.
For the notional sale, the hirer of a depreciating asset may be entitled to claim a deduction for the decline in value. The cost of the asset for this purpose is taken to be the agreed cost or value, or the arm’s length value, if the dealing is not at arm’s length. For assets subject to the small business entity depreciation rules, see Small business entity concessions. For assets not subject to the small business entity depreciation rules, see Deduction for decline in value of depreciating assets.
If the partnership has included any hire-purchase charges for the goods at item 5, include the amount at item 5 – label B Expense reconciliation adjustments as an expense add back. Include the deduction for the interest component of the hire-purchase payments as an expense subtraction at label B.
Landcare operations and decline in value of a water facility, fencing asset and fodder storage asset
Landcare operation expenditure and expenditure for water facilities, fencing assets and fodder storage assets incurred in partnership is allocated to each partner, and the relevant deduction is available to the partner. It is not available in calculating the net income or loss of a partnership.
The partnership must add back any such capital expenditure included as an expense at item 5. Show the amount as an expense add back at item 5 – label B Expense reconciliation adjustments item 5.
Limited recourse debt
Under Division 243 of the ITAA 1997 (the limited recourse debt rules), you must include excessive deductions for capital allowances as assessable income if expenditure on property has been financed or refinanced wholly or partly by limited recourse debt. This will occur if:
- the limited recourse debt is terminated after 27 February 1998 but has not been paid in full by the debtor, and
- because the debt has not been paid in full, the capital allowance deductions allowed for the expenditure exceed the deductions that would be allowable if the unpaid amount of the debt was not counted as capital expenditure of the debtor. Special rules apply in working out whether the debt has been fully paid.
A limited recourse debt is a debt where the rights of the creditor against the debtor in the event of default in payment of the debt, or of interest, are limited wholly or predominantly to the property that has been financed by the debt, or is security for the debt, or rights, for such property. A debt is a limited recourse debt if, notwithstanding that there may be no specific conditions to that effect, it is reasonable to conclude that the creditor’s rights against the debtor are capable of being limited in that way.
A limited recourse debt includes a notional loan under a hire-purchase or instalment-sale agreement of goods to which Division 240 of the ITAA 1997 applies (see section 243-20 of the ITAA 1997). The rules in section 243-75 apply where Divisions 243 and 245 (commercial debt forgiveness, see Appendix 4) of the ITAA 1997 both apply to the same debt.
Loss on the sale of a depreciating asset
Any such loss included in the accounts will differ from the balancing adjustment amount taken into account for taxation purposes.
If the accounts show a loss on the sale of a depreciating asset under item 5 – label N, show that amount as an expense add back at item 5 – label B Expense reconciliation adjustments. See Balancing adjustment amounts.
Low-value pools
If the partnership has allocated depreciating assets used for different income-producing purposes to its low-value pool (for example, some assets that are used for producing rental income and others that are used in carrying on a business) show the low-value pool deduction at item 18 Other deductions. However, if all the depreciating assets in the low-value pool are used for the same income-producing purpose, show the deduction for decline in value of the assets in the pool as follows:
- For depreciating assets used in carrying on a business, show the deduction as an expense subtraction at item 5 – label B Expense reconciliation adjustments.
- For depreciating assets used to produce rental income, show the deduction at item 9 – label H.
- For depreciating assets used to produce Australian investment income, show the deduction at item 16 Deductions relating to Australian investment income.
To calculate the deduction for decline in value of depreciating assets in a low-value pool, use worksheet 2 in Guide to depreciating assets 2022.
You can also work out your depreciation and capital allowance claims by using the Depreciation and capital allowances tool.
Luxury car leases
Luxury car leasing arrangements (other than genuine short-term hire arrangements) are treated as a notional sale and loan transaction.
A leased car (new or second hand) is a luxury car if its market value exceeds the car limit at the start of the lease.
For the notional loan, divide the actual lease payments into notional principal and finance charge components. Depending on how much the car is used for an income producing purpose, the lessee can claim a deduction for that part of the finance charge component for the notional loan applicable for the particular period (the accrual amount), subject to any reduction required under the thin capitalisation rules.
For the notional sale, the lessee is treated as the holder of the luxury car and may be entitled to claim a deduction for the decline in value of the car.
For the purpose of calculating the deduction, the cost of the car is limited to the car limit for the income year in which the lease is granted. The car limit for 2021–22 is $60,733.
For information about where to show the deduction for decline in value, see Deduction for decline in value of depreciating assets.
Alternatively, if the lessee is using the small business entity depreciation rules for the income year in which the lease is entered into, the lessee allocates the car to its general small business pool. For the purpose of calculating the deduction under the small business entity depreciation rules, the cost of the car is limited to the car limit for the income year in which the lease is granted.
In summary, the lessee is entitled to deductions equal to:
- the accrual amount, and
- the decline in value of the luxury car, based on the applicable car limit, unless the car is allocated to the general small business pool.
Both deductions are reduced by any use of the car for a non-taxable purpose.
If the car is allocated to the general small business pool with the cost based on the applicable car limit, calculate the deduction under the small business entity depreciation rules.
If the lease terminates or is not extended or renewed, and the lessee does not actually acquire the car from the lessor, the lessee is treated under the rules as disposing of the car by way of sale to the lessor. This constitutes a balancing adjustment event. If the car is not subject to the small business entity depreciation rules, you must determine any assessable or deductible balancing adjustment amount for the lessee. If the car has been allocated to the lessee’s general small business pool, see Step 4 Disposal of depreciating assets.
If you included luxury car lease payments at item 5 – label G Lease expenses, include the amount at item 5 – label B Expense reconciliation adjustments as an expense add back. Include the deduction for the accrual amount as an expense subtraction at item 5 – label B Expense reconciliation adjustments.
Profit on the sale of a depreciating asset
Any such profit included in the accounts will differ from the balancing adjustment amount taken into account for taxation purposes.
If the accounts show a profit on the sale of a depreciating asset under item 5 – label G or H Other business income, include that amount as an income subtraction at item 5 – label A Income reconciliation adjustments. See Balancing adjustment amounts.
Section 40-880 deduction
Immediate deductibility start-up costs
Section 40-880 allows certain partnerships to immediately deduct certain start-up expenses.
Expenditure is fully deductible in the income year incurred if:
- it is incurred by a partnership that
- is a small business entity,
- would be a small business entity if the aggregated turnover threshold was $50 million, or
- is not in business and is not connected with or an affiliate of another entity that is carrying on a business and that entity
- is not a small business entity and
- would not be a small business entity if the aggregated turnover threshold was less than $50 million, and
- it relates to a business that is proposed to be carried on and is either
- incurred for advice or services relating to the proposed structure or proposed operation of the business, or
- is paid to an Australian government agency in relation to setting up the business or establishing its operating structure.
Section 40-880 deduction
If the deduction relates to an earlier income year, or does not meet the criteria set out above, the previous rules apply, which is a five-year write-off for certain business-related capital expenditure incurred by the partnership for a past, present or proposed business.
As part of the tax treatment for black hole expenditure, rules apply to business-related capital expenditure. Section 40-880 deductions are no longer limited to seven specific types of business-related capital expenditure. The partnership may now be able to claim a deduction for capital expenditure it incurs:
- for its business
- for a business that it used to carry on, such as capital expenses incurred in order to cease the business
- for a business it proposes to carry on, such as the costs of feasibility studies, market research or setting up the business entity
- as a shareholder or partner to liquidate or deregister a company or to wind up a trust or partnership, provided that the company, trust or partnership carried on a business.
If the partnership incurs the relevant capital expenditure for its existing business, a former business or a proposed business, the expenditure is only deductible to the extent the business is, was, or is proposed to be, carried on for a taxable purpose.
The partnership can't deduct expenditure for an existing business that is carried on by another entity or a proposed business unless it is proposed to commence within a reasonable time. However, it can deduct expenditure it incurs for a business that used to be, or is proposed to be, carried on by another entity. Such expenditure is only deductible to the extent that:
- the business was, or is proposed to be, carried on for a taxable purpose, and
- the expenditure is in connection with
- business that was, or is proposed to be, carried on, and
- derivation of assessable income from that business by the partnership.
A section 40-880 deduction can't be claimed for capital expenditure to the extent that it:
- can be deducted under another provision of the income tax laws
- forms part of the cost of a depreciating asset the partnership holds, used to hold, or will hold
- forms part of the cost of land
- relates to a lease or other legal or equitable right
- would be taken into account in working out an assessable profit or deductible loss
- could be taken into account in working out a capital gain or a capital loss from a CGT event
- would be specifically not deductible under the income tax laws if the expenditure was not capital expenditure
- is specifically not deductible under the income tax laws for a reason other than that the expenditure is capital expenditure
- is of a private or domestic nature
- is incurred for gaining or producing exempt income or non-assessable non-exempt income
- is excluded from the cost or cost base of an asset because, under special rules in the UCA or capital gains tax regimes respectively, the cost or cost base of the asset was taken to be the market value
- is a return of, or on, capital (for example, distributions by trustees) or a return of a non-assessable amount (for example, repayments of loan principal).
The partnership deducts 20% of the qualifying capital expenditure in the year it is incurred and in each of the following four years.
If a partner in a partnership is an individual, the non-commercial loss rules may defer the partner’s deductions for their share of a loss from a business activity of the partnership. See Non-commercial losses: partnership.
Show the section 40-880 deduction as an expense subtraction at item 5 – label B Expense reconciliation adjustments. Also show the amount at item 49 Capital allowances.
If you have included any of the expenditure incurred for the income year as an expense at item 5, show this amount as an expense add back at item 5 – label B Expense reconciliation adjustments.
Temporary full expensing
Eligible businesses can deduct the business portion of the cost of:
- eligible new depreciating assets that are first held, and first used or installed ready for use for a taxable purpose, from 7:30pm AEDT on 6 October 2020 to 30 June 2023
- improvements made to eligible depreciating assets even if those assets were acquired before 7:30pm AEDT on 6 October 2020.
For businesses with aggregated turnover of less than $50 million, temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
For more information, see Temporary full expensing.
The TOFA rules and UCA
The TOFA rules contain interaction provisions which may modify the cost and termination value of a depreciating asset acquired by a partnership to which the TOFA rules apply. This will be the case where the consideration (or a substantial proportion of it) is deferred for greater than 12 months after delivery.
For more information, see Guide to the taxation of financial arrangements (TOFA) and Guide to depreciating assets 2022.
Return to: Appendixes