Capped life of certain depreciating assets
40-102 Capped life of certain depreciating assets
If this section applies to a *depreciating asset, the effective life of the asset is the period (the capped life) that applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)).
Working out if this section applies
This section applies to a *depreciating asset if:
you choose, under paragraph 40‑95(1)(a), to use an *effective life determined by the Commissioner for the asset under section 40‑100; and
your choice is limited to a determination in force at the time mentioned in paragraph 40‑95(2)(a) or (c); and
a *capped life applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)); and
the capped life is shorter than the effective life mentioned in paragraph (a).
For the purposes of this section, the relevant time is:
the *start time of the *depreciating asset if:
paragraph 40‑95(2)(c) applies to you; or
paragraph 40‑95(2)(a) applies to you and a *capped life does not apply to the asset under subsection (4) or (5) at the time mentioned in that paragraph; or
paragraph 40‑95(2)(a) applies to you and the capped life that applies to the asset under subsection (4) or (5) at the time mentioned in that paragraph is longer than the capped life that applies to the asset at its start time; or
if paragraph (a) does not apply—the time mentioned in paragraph 40‑95(2)(a).
Capped life
If the *depreciating asset corresponds exactly to the description in column 2 of the table, the capped life of the asset is the period specified in column 3 of the table.
Capped life of certain depreciating assets | ||
Item | Kind of depreciating asset | Period |
1 | Aeroplane used predominantly for agricultural spraying or agricultural dusting | 8 years |
2 | Aeroplane to which item 1 does not apply | 10 years |
3 | Helicopter used predominantly for mustering, agricultural spraying or agricultural dusting | 8 years |
4 | Helicopter to which item 3 does not apply | 10 years |
5 | Bus with a *gross vehicle mass of more than 3.5 tonnes | 7.5 years |
6 | Light commercial vehicle with a *gross vehicle mass of 3.5 tonnes or less and designed to carry a load of 1 tonne or more | 7.5 years |
7 | Minibus with a *gross vehicle mass of 3.5 tonnes or less and designed to carry 9 or more passengers | 7.5 years |
8 | Trailer with a *gross vehicle mass of more than 4.5 tonnes | 10 years |
9 | Truck with a *gross vehicle mass of more than 3.5 tonnes (other than a truck that is used in *mining and quarrying operations and that is not of a kind that can be registered to be driven on a public road in the place in which the truck is operated) | 7.5 years |
10 | Vessel for which you have a certificate under Part 2 of the Shipping Reform (Tax Incentives) Act 2012 | 10 years |
Item 10 of the table in subsection 40‑102(4) does not apply to a vessel if:
*ordinary income that you *derive, or your *statutory income, in relation to the vessel; or
ordinary income that your *associate derives, or your associate’s statutory income, in relation to the vessel;
is exempt from income tax under section 51‑100 for the income year for which you are working out the vessel’s decline in value.
If the *depreciating asset is of a kind described in column 2 of the table and is used in the industry specified in column 3 of the table for the asset, the capped life of the asset is the period specified in column 4 of the table.
Capped life of certain depreciating assets used in specified industries | |||
Item | Kind of depreciating asset | Industry in which the asset is used | Period |
1 | Gas transmission asset | Gas supply | 20 years |
2 | Gas distribution asset | Gas supply | 20 years |
3 | Oil production asset (other than an electricity generation asset or an offshore platform) | Oil and gas extraction | 15 years |
4 | Gas production asset (other than an electricity generation asset or an offshore platform) | Oil and gas extraction | 15 years |
5 | Offshore platform | Oil and gas extraction | 20 years |
6 | Asset (other than an electricity generation asset) used to manufacture condensate, crude oil, domestic gas, liquid natural gas or liquid petroleum gas but not if the manufacture occurs in an oil refinery | Petroleum refining | 15 years |
7 | Harvester | Primary production sector | 6 2/3 years |
8 | Tractor | Primary production sector | 6 2/3 years |
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