Problem: Gigantor Holdings Ltd is a large project engineering company. The company has an annual turnover for the year ended 30 June 2022 of $9.3 billion.
On 3 March 2022, the company purchased the following assets for exclusive use in their engineering business:
| Asset |
Cost |
Tax Effective Life |
| Computer software |
$870 |
5 years |
| Motor vehicle |
$96,000 |
8 years |
| Engineering equipment |
$1,460,000 |
10 years |
The company has elected to self-assess the effective life of its depreciating assets for taxation purposes (as outlined above) and therefore does not want to use the Commissioner's effective lives as published in Taxation Ruling TR 2021/3.
Assuming that Gigantor Holdings Ltd wishes to maximise its depreciation deduction, what amount can the company claim under Division 40 of the ITAA (1997) in relation to the 120 days from 3 March 2022 to 30 June 2022?