Draft taxation ruling released on composite items, identifying depreciating assets

Given the ATO focus on capital allowances and the release of recent guidance on capitalised labour, Michael Baartz, Gabby Burcul, James Macky and Jenny Wong outline why taxpayers should consider the impact of the revised draft ruling on their positions.

The Australian Taxation Office (ATO) released Taxation Ruling TR 2023/D2 on 4 October 2023 setting out guiding principles to assist taxpayers in identifying the relevant depreciating asset where an asset consists of a number of components for the purposes of determining deductions for the decline in value under Division 40 of the Income Tax Assessment Act 1997 (ITAA 97). Whether a composite item is itself a depreciating asset or if its components are separate depreciating assets is relevant ...

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Authors: Michael Baartz, Gabby Burcul,

Published Date: 05 October 2023