Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_2:p2
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 2/4)
Character Range: 10940–13562

spectrum licences
40‑125 Merging depreciating assets
40‑130 Choices
40‑135 Certain anti‑avoidance provisions
40‑140 Getting tax information from associates
40‑145 Application of Criminal Code

[This is the end of the Guide.]

Operative provisions

40‑25  Deducting amounts for depreciating assets

You deduct the decline in value

 (1) You can deduct an amount equal to the decline in value for an income year (as worked out under this Division) of a *depreciating asset that you *held for any time during the year.

Note 1: Sections 40‑70 and 40‑75 show you how to work out the decline for most depreciating assets. There is a limit on the decline: see subsections 40‑70(3) and 40‑75(7).

Note 2: STS taxpayers work out the amount they can deduct under Division 328.

Note 3: Generally, only one taxpayer can deduct amounts for a depreciating asset. However, if you and another taxpayer jointly hold the asset, each of you deduct amounts for it: see section 40‑35.

Reduction of deduction

 (2) You must reduce your deduction by the part of the asset's decline in value that is attributable to your use of the asset, or your having it *installed ready for use, for a purpose other than a *taxable purpose.

Example: Ben holds a depreciating asset that he uses for private purposes for 30% of his total use in the income year.

 If the asset declines by $1,000 for the year, Ben would have to reduce his deduction by $300 (30% of $1,000).

Further reduction: leisure facilities and boats

 (3) You may have to make a further reduction for a *depreciating asset that is a *leisure facility or a boat attributable to your use of it, or your having it *installed ready for use, for a *taxable purpose.

 (4) That reduction is the part of the asset's decline in value that is attributable to your use of the asset, or your having it *installed ready for use, at a time when:
 (a) its use did not constitute a *fringe benefit; or
 (b) for a *leisure facility—you did not use it or hold it for use as mentioned in paragraph 26‑50(3)(b) (about using it in the course of your business or for your employees); or
 (c) for a boat—you did not use it or hold it for use as mentioned in paragraph 26‑50(5)(b), (c) or (d) (about using it mainly for letting on hire, mainly for transporting the public or goods for payment or for a purpose that is essential to the efficient conduct of your business).

Exception: low‑value pools

 (5) Subsections (2), (3) and (4) do not apply to *depreciating assets allocated to a low‑value pool.

Note: See Subdivision 40‑E for low‑value pools.

Exception: Use of 1/3 of actual expenses method