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Capital allowances

  • Capital allowances

    Capital allowances: effective life review for certain determinations in Table A of Taxation Ruling TR 2015/2 – review to begin

    We are reviewing certain determinations in Table A of Taxation Ruling TR 2015/2 – ‘the schedule’ to make new effective life determinations.

    You use effective lives to work out how much you can claim as a tax deduction for an asset’s decline in value (depreciation deduction). The purpose of our review is to ensure our effective life determinations cover all assets commonly used by your industry, and reflect current industry practices and expectations. Our determinations provide you with ‘safe harbour lives’. You also have the option to self-assess effective lives.

    We anticipate the review will cover assets used in industries or operations such as:

    AGRICULTURE, FORESTRY AND FISHING

    (01110 TO 05290)

    Agriculture

    (01110 TO 01990)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Bee farming plant:

    Beehives

    131/3

    1 Jan 2001

    Processing plant

    20

    1 Jan 2001

    Hop growers’ plant:

    Hop picking machines

    131/3

    1 Jan 2001

    Kilns

    20

    1 Jan 2001

    Pea-viners, pea cleaners, vine and straw conveyors

    10

    1 Jan 2001

    MANUFACTURING

    (11110 TO 25990)

    Poultry processing

    (11120)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Conveyor systems and troughing

    20

    1 Jan 2001

    General plant

    131/3

    1 Jan 2001

    Refrigeration plant and boiler

    10

    1 Jan 2001

    Fruit and vegetable processing

    (11400)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Fruit and vegetable canning plant

    20

    1 Jan 2001

    Jam-making plant

    20

    1 Jan 2001

    Grain mill product processing

    (11610)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Flour-milling plant:

    Bins (wooden)

    331/3

    1 Jan 2001

    General plant

    131/3

    1 Jan 2001

    Linseed oil manufacturing plant

    131/3

    1 Jan 2001

    Rice milling plant

    131/3

    1 Jan 2001

    Confectionery manufacturing

    (11820)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Confectioners’ machinery

    20

    1 Jan 2001

    Soft drink, cordial and syrup manufacturing

    (12110)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Ice-making machinery:

    Condensers

    131/3

    1 Jan 2001

    Expansion pipes

    40

    1 Jan 2001

    General machinery

    131/3

    1 Jan 2001

    Ice moulds

    5

    1 Jan 2001

    Spirit manufacturing

    (12130)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Distillery plant (brandy etc)

    131/3

    1 Jan 2001

    Cigarette and tobacco product manufacturing

    (12200)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Tobacco kilns

    20

    1 Jan 2001

    Pulp, paper and converted paper product manufacturing

    (15100, 15210, 15220 and 15290)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Cigarette paper cutting and folding plant

    10

    1 Jan 2001

    OTHER SERVICES

    (94110 TO 96030)

    Photographic film processing

    (95320)

    ASSET

    LIFE (YEARS)

    REVIEWED

    DATE OF APPLICATION

    Mini lab

    10

    1 Jan 2001

    Photo engraving plant:

    Automatic (dark room) cameras

    10

    1 Jan 2001

    General plant

    20

    1 Jan 2001

    Powderless etching machines

    10

    1 Jan 2001

    Power operated proofing presses

    131/3

    1 Jan 2001

    Photo lab (one-hour service)

    10

    1 Jan 2001

    We expect to complete our review of these assets within 12 months, with new effective life determinations applying from 1 July 2016. Draft effective lives will be issued for public comment well before final decisions are made.

    As part of this review, we will:

    • Identify the assets currently used in the industry
    • Consult with major interest groups, such as industry representative bodies, users and suppliers (including using interviews and site asset inspections)
    • Complete a report with recommendations for new effective lives based on an analysis of the factors listed in the effective life taxation ruling
    • Remove redundant items currently in the effective life schedule.

    See also:

    TR 2015/External Link Income tax: effective life of depreciating assets (applicable from 1 July 2015)

    Participation in the review process is entirely voluntary. However, we find strong participation from an industry gives members confidence that will properly consider their range of experience, and that the determinations will be useful to industry members.

    If you would like to participate in the review, contact the ATO:-

    for:

    • Bee farming plant (01110 to 01990)
    • Pea-viners, pea cleaners, vine and straw conveyors (01110 to 01990)
    • Fruit and vegetable processing (11400)
    • Grain mill product manufacturing (11610)
    • Cigarette and tobacco manufacturing (12200)
    • Pulp, paper and converted paper product manufacturing (15100, 15210, 15220 and 15290)
    • Photographic film processing (95320)

    for:

    • Hop growers’ plant (01110 to 01990)
    • Poultry processing (11120)
    • Confectionary manufacturing (11820)
    • Soft drink, cordial and syrup manufacturing (12110)
    • Spirit manufacturing (12130)

    Source:- www.ato.gov.au