Low Value Pool

<h1 >Low-value pools</h1>

<p >You can work out the depreciation on certain low-cost and low-value assets you hold by allocating them to a low-value pool and depreciating them at a set annual rate.

A <strong >low-cost asset</strong> is one that costs less than $1,000 after deducting any GST you are entitled to claim in your business activity statement.

A <strong >low-value asset</strong> is an asset that has depreciated over one or more years and now has a written-down value of less than $1,000.</p>

<h2 >Starting a low-value pool</h2>

<p >You start a low-value pool when you first choose to allocate a low-cost or low-value asset to the pool.

Once you choose to create a low-value pool and allocate a low-cost asset to it, you must pool all other low-cost assets you start to hold. You can decide whether to allocate low-value assets to the pool on an asset-by-asset basis.

Once you've allocated an asset to the pool, it must remain there.</p>

<h2 >Calculating the depreciation</h2>

<p >You then calculate the depreciation of all the assets in the low-value pool once a year at a diminishing value rate of 37.5%.

If you purchase or acquire an asset and allocate it to the pool during an income year, you calculate its deduction at a rate of 18.75% (that is, half the pool rate) in that first year. You use this rate regardless of when you allocate the asset to the pool during the year.</p>

<h2 >Assets you can’t allocate to a low-value pool</h2>

<p >You cannot allocate the following assets to a low-value pool:</p>

<ul >

<li >assets for which you previously calculated depreciation deductions using the prime cost method</li>

<li >horticultural plants, including grapevines</li>

<li >assets for which you can claim deductions under the simpler depreciation for small business rules</li>

<li >assets that cost $100 or less for which you can claim an immediate deduction</li>

<li >certain assets you use to conduct research and development activities</li>

<li >portable electronic devices (including laptops, portable printers, personal digital assistants, calculators, mobile phones and portable GPS navigation receivers), computer software, protective clothing, briefcases and tools of trade, if:

<ul >

<li >you provided the item to your employee, or</li>

<li >you paid for some or all of the cost of the item (or reimbursed your employee for it) and the provision, payment or reimbursement was exempt from fringe benefits tax.</li>

</ul>

 </li>

</ul>

<h2 >Sampling rule</h2>

<p >If you purchase a large number of assets for your business and use a low-value pool, you may be able to use the sampling rule to estimate how much you can claim as an immediate deduction and how much you must depreciate over time.

The sampling rule saves you time because you don't need to decide whether each purchase is of a <strong >revenue</strong> nature (and thus immediately deductible) or of a <strong >capital</strong>nature (which must be written off over time).

Low Value Pool

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