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Determining Depreciation Recovery Periods

Determining the correct monthly depreciation amounts for an asset requires the correct usage of recovery periods. Under MARCS, assets are assigned to a property class such as 3 year, 5 year, 7 year, nonresidential real property, etc. Associated with each property class is a recovery period in 12 month intervals (years).

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DEPRECIATION RATES - WEAR & TEAR SCHEDULE. The Seventh Schedule is reproduced hereunder. For rates applicable prior to 1/1/95, kindly contact the Board of Inland Revenue .

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General depreciation rates - Inland Revenue

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total depreciation you can take over the tax life or recovery period of the property The annual depreciation amount is the total depreciation divided by the recovery period in years If half year convention is used take ½ the annual depreciation in the first year and ½ in the year after the last year in the tax life (total years = 1+tax life)

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* The 20% depreciation loading doesn't apply to assets acquired after 20 May 2010. **For buildings, depreciation will reduce to 0% from the 2011–12 income year where they have an estimated useful life of 50 years or more. The general depreciation rates, including the 20% loading, are listed in …

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