CA ANZ provided feedback on Inland Revenue draft Questions We’ve Been Asked – Elections not to Depreciate Commercial Buildings ED0233.  This item sets out the Commissioner’s view regarding whether an election can be made not to depreciate a commercial building on or after the 2020-21 income year, and what the Commissioner requires for an effective election.  The item considers three scenarios:  

• depreciation has previously been claimed on the commercial building
• an election not to depreciate the commercial building was previously made, and
• depreciation has not previously been claimed on the commercial building and an effective election not to depreciate has not been made.  

CA ANZ recommends two policy issues be considered:

• a law change be enacted to allow a taxpayer who has claimed depreciation on a commercial building before the 2011-12 income year an option to elect not to depreciate it from the 2020-21 income year onward, and
• the rule that a taxpayer is deemed to have claimed depreciation on depreciable property be reviewed and, if appropriate, repealed.