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Joachim(Devotee)Devotee
27 Jan 2022

Hi , Please help me on this


Does the depreciation policy or depreciation concessions followed and utilised by a company within a group have a bearing on the policy and concessions other companies within the same group could follow or utilise ?


E.g If a company within a group of companies chooses to follow a a particular method for depreciation (e.g simplified or effective life) , should all other companies follow the same depreciation policy ?


Eg. If the same company is eligible for temporary full expensing concession but decides to opt out of it , should other companies within the group also opt out of it ?


Thank you

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RichATO(Community Support)Community Support
29 Jan 2022

Hello @Joachim


The answer to your question depends on the nature of the 'group'.

If the companies are formed into a TCG (Tax Consolidated Group) then there will be a holding company that heads the TCG and pays income tax and PAYG instalments for all of the other companies. Often, but not always, in a TCG the group's assets are combined into a single asset pool for depreciation purposes also. But even if this hasn't been done in a TCG there is normally a single approach to depreciation as the holding company operates as single entity on behalf of all members of the consolidated group for tax purposes. This will require a uniform approach to depreciation of assets.


If there is no TCG structure in place and the companies simply have common owners and are lodging their own separate tax returns then each company can do what they like in terms of depreciation, providing they are eligible for simplified depreciation.

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Most helpful reply

RichATO(Community Support)Community Support
29 Jan 2022

Hello @Joachim


The answer to your question depends on the nature of the 'group'.

If the companies are formed into a TCG (Tax Consolidated Group) then there will be a holding company that heads the TCG and pays income tax and PAYG instalments for all of the other companies. Often, but not always, in a TCG the group's assets are combined into a single asset pool for depreciation purposes also. But even if this hasn't been done in a TCG there is normally a single approach to depreciation as the holding company operates as single entity on behalf of all members of the consolidated group for tax purposes. This will require a uniform approach to depreciation of assets.


If there is no TCG structure in place and the companies simply have common owners and are lodging their own separate tax returns then each company can do what they like in terms of depreciation, providing they are eligible for simplified depreciation.

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