It’s important to know that some assets are not depreciating assets which means you can’t claim a deduction for their depreciation.
Land and items of trading stock are not depreciating assets. Trading stock is anything your business acquires, produces or manufactures for the purpose of manufacturing, selling or exchanging (including livestock). While trading stock might meet the basic requirements of being a depreciating asset, items of trading stock are not depreciating assets and are taxed under the trading stock rules.
Most intangible assets are not treated as depreciating assets, even though they may otherwise meet the basic requirement to be one. Intangible assets include property, assets and rights that are not physical or financial assets but may be controlled for use in commercial activities.
However, the following intangible assets, if they are not trading stock, are depreciating assets:
- in-house software
- certain items of intellectual property (patents, registered designs, copyrights and licences to use these types of intellectual property)
- mining, quarrying or prospecting rights and information
- certain indefeasible rights to use a telecommunications cable system
- certain telecommunications site access rights
- spectrum licences
- datacasting transmitter licences.
