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Re: Moving assets to a low value pool

Taxicorn

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Replies 3

I am of the opinion that you only get 1 chance to move a low value asset to a Low Value Pool and that is in the first year that it drops below $1,000 even if a Low value pool doesn't already exists.

 

I constantly see low value pools being created years after assets went below $1,000.

 

I can't find any mention of my belief nor the practice of moving assets several years after falling below $1,000

 

Any Assistance would be great !

 

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Most helpful response

Devotee Registered Tax Practitioner

Replies 2

I am of the opinion that you only get 1 chance to move a low value asset to a Low Value Pool and that is in the first year that it drops below $1,000 even if a Low value pool doesn't already exists.

 

ATO does not indicate one way or the other.

https://www.ato.gov.au/Forms/Guide-to-depreciating-assets-2020/?page=12

 

ATP please clarify.

3 REPLIES 3

Most helpful response

Devotee Registered Tax Practitioner

Replies 2

I am of the opinion that you only get 1 chance to move a low value asset to a Low Value Pool and that is in the first year that it drops below $1,000 even if a Low value pool doesn't already exists.

 

ATO does not indicate one way or the other.

https://www.ato.gov.au/Forms/Guide-to-depreciating-assets-2020/?page=12

 

ATP please clarify.

Taxicorn

Replies 1

@Bruce4Tax 

 

Thanks.

 

Got 2 new clients who have 4 rentals between them.

Property A & B 50% ownership, Property C 100% by Client A and Property D 100% by Client B.

 

Things have been depreciated that should have been claimed outright in Div 40 AND Div 43.

I am considering moving all Div 40 into Low Value Pools.

 

I know technically there should only be 1 pool but as this will be written off when property is sold I think it's best to have Pools by property.

They previously sold 2 other properties last financial year, so they may sell more soon?

 

 

Devotee Registered Tax Practitioner

Replies 0

I know technically there should only be 1 pool but as this will be written off when property is sold I think it's best to have Pools by property.

 

I use HandiLedger for depn on properties, so I can have separate depn and capital works schedules for each property. 

When  depn asset's WDV passes under $1000, the method is changed to LVP and all the properties feed into a single LVP with a breakdown of the assets by property.