Capital Allowances
What many people used to know as “depreciation” now comes under the category of Uniform Capital Allowances (UCA). This is the means by which taxpayers deduct the cost of assets acquired over the effective life of those assets. UCA also extends deductibility to other business costs that were not previously allowed.
Some of the features of UCA that affect most small business taxpayers are:-
- The effective life tables produced by the ATO. These tables provide the rates for claiming the annual decline in the value of depreciating assets.
- The pooling of low value assets
- The immediate write off of assets
- Deciding whether of not to enter the Simplified Tax System (see separate Fact Sheet) where depreciation rates can be higher.
- Choosing whether to claim the decline in value using the Prime Cost Method or the Diminishing Value Method
There are many choices available to taxpayers within these rules. Please
contact me if you require more detailed information.