You Guide to Capital Gains & Depreciation Schedule Examples

Q: What is low-value pooling?

A: Low-value pooling is a way of depreciating plant items which cost less than $1000 or have an un-deducted cost of less than $1000. The following types of depreciable assets can be allocated to a low-value pool:

• Low-cost assets – A low-cost asset is a depreciable asset that has an opening value of less than $1000 in the year of acquisition.

• Low-value assets – A low-value asset is a depreciable asset that has a written down value of less than $1000. That is, if the opening value of an asset is greater than $1000 in the year of acquisition but the value remaining after depreciating  over time is now less than $1000. Assets meeting this classification are placed in an itemised pool.

You cannot allocate the following depreciating assets to a low-value pool:

• Assets for which you have previously claimed deductions calculated using the prime cost method.

• Assets that cost $300 or less (you can claim assets under $300 as an immediate deduction).

Pooling is used in conjunction with the diminishing value method to maximise deductions in the early years of ownership.

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