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Technical tax area Ngā tūmomo whakataunga me ngā aratohu

Tax treatment of wooden scaffolding planks

Section DA 1(1)(b) of the Income Tax Act 2004


We have recently been asked to clarify the income tax treatment of wooden planks used in scaffolding, ie, planks used as working platforms on metal-framed scaffolding.


The Commissioner considers that the wooden planks are part of the asset class "scaffolding" and, therefore, the planks must initially be depreciated at the same rate as the scaffolding framework which they are used with. However, as "scaffolding", as described in DEP 1 (Tax Depreciation Rate General Determination Number 1) is the depreciable property, any plank that is replaced because it is no longer useful in deriving assessable income, can be treated as a repair or maintenance (replacement) for income tax purposes. The cost of any replacement wooden planks used in conjunction with scaffolding can be claimed as a deduction in the year of purchase.


Tax Depreciation Determination DEP1 under the "Contractors, Builders and Quarrying" industry class sets estimated useful lives, diminishing value and straight-line depreciation rates for scaffolding as follows:

  Estimated useful life DV dep'n rate (%) SL dep'n rate (%)
Scaffolding (aluminium)82215.5
Scaffolding (other than aluminium)15.5128

For the income years corresponding to the 2005-06 and subsequent tax years, in respect of scaffolding acquired on or after 1 April 2005, Tax Depreciation Determination DEP54 sets the rates for the above assets as follows:

  DV dep'n rate (%) SL dep'n rate (%)
Scaffolding (aluminium)2517.5
Scaffolding (other than aluminium)138.5

The Commissioner considers wooden planks, used with scaffolding framework, form an essential and integral part of the scaffolding.

There are a number of factors to take into account when considering whether or not an asset is a separate part of a complete asset. These factors consider physical separation, functional separation, completeness and the degree of permanence of the asset under consideration. These factors were considered in respect to "scaffolding", and it was concluded that scaffolding could not function without the planks.

On balance, the degree of physical separation, affixation, and the fact that the planks are readily relocatable tends to suggest that the planks could be separate items of depreciable property. However, the functionality and completeness of scaffolding combined with the degree of permanence leads to the conclusion that scaffolding includes both the framework and the planks. Accordingly, wooden planks used in this manner are not sufficient to be categorised functionally as a separate depreciable item.

It is expected that wooden scaffolding planks will have a shorter estimated useful life than the scaffolding framework. This may be due to a variety of factors, including regular replacement to meet health and safety requirements. As the wooden planks form part of the asset class "scaffolding", they must be depreciated at the rate for the scaffolding they are used in conjunction with. However, where the wooden planks are replaced the cost of replacement can be claimed as a deduction in the year of purchase.

Other types of planks

The Commissioner recognises that wooden planks are used in the construction industry and in other industries for purposes other than as scaffolding and intends to issue a separate depreciation determination to reflect this. In this determination the planks are described as "Builders' planks (wooden)" to distinguish them from planks used in conjunction with scaffolding. The new depreciation rate will only be applicable where the taxpayer does not choose to claim a current year deduction for the purchases under the "low value asset" provisions of section EE 31 of the Income Tax Act 2004 and the requirements of that section have been met.