Depreciation: The new parameters August 2004 RETURN
After years of ambiguous legislation and criticism from the property, business and accounting sectors, the ATO has moved to provide a more consistent and definable guideline for the treatment of depreciation. It has released its model for the depreciable life of various individual items or the periods in which they can be written off as non cash expenditure, against the income provided from investment in property or capital items. The resultant taxation benefits from depreciation have been ingrained in decisions on investment and are crucial to investor cash flows. Whilst we applaud any moves to simplify the reporting process for investors, we are disappointed with the ATO’s move to decrease the rate of deductabilty by extending the effective life of many assets. Some examples of the new rates: Window furnishings 6-10 yrs, dishwasher 10 yrs, cook top/rangehood/oven 12yrs, carpets 10 yrs, garden shed 15 yrs, clothes dryer/washing machine 10 yrs. To view the official list see the Australian Tax Office website at www.ato.gov.au. NB property purchased in periods of differing rates will need to be considered by your taxation expert before the correct deductions can be made..
After years of ambiguous legislation and criticism from the property, business and accounting sectors, the ATO has moved to provide a more consistent and definable guideline for the treatment of depreciation. It has released its model for the depreciable life of various individual items or the periods in which they can be written off as non cash expenditure, against the income provided from investment in property or capital items. The resultant taxation benefits from depreciation have been ingrained in decisions on investment and are crucial to investor cash flows. Whilst we applaud any moves to simplify the reporting process for investors, we are disappointed with the ATO’s move to decrease the rate of deductabilty by extending the effective life of many assets. Some examples of the new rates: Window furnishings 6-10 yrs, dishwasher 10 yrs, cook top/rangehood/oven 12yrs, carpets 10 yrs, garden shed 15 yrs, clothes dryer/washing machine 10 yrs. To view the official list see the Australian Tax Office website at www.ato.gov.au. NB property purchased in periods of differing rates will need to be considered by your taxation expert before the correct deductions can be made..