Tax depreciation basics: US MACRS and Section 179, UK capital allowances

Skills you'll practise

• Decide whether a purchase is expensed, depreciated for US tax or claimed as UK plant and machinery
• Calculate US MACRS depreciation using the GDS percentages and the correct convention
• Choose between Section 179, the special depreciation allowance and regular MACRS for a US purchase within the published limits
• Calculate UK capital allowances using the annual investment allowance, first-year allowances and writing down allowance pools
• Record disposals, private use and the details your tax preparer needs on a tax asset schedule

Course outline

1. 1.Deciding whether a purchase is expensed, depreciated for US tax or claimed as UK plant and machineryLesson · 18 min
2. 2.Calculating US MACRS depreciation using the GDS percentages and the correct conventionLesson · 20 min
3. 3.Choosing between Section 179, the special depreciation allowance and regular MACRS for a US purchase within the published limitsLesson · 18 min
4. 4.Calculating UK capital allowances using the annual investment allowance, first-year allowances and writing down allowance poolsLesson · 22 min
5. 5.Recording disposals, private use and the details your tax preparer needs on a tax asset scheduleLesson · 16 min
6. 6.Tax depreciation basics: US MACRS and Section 179, UK capital allowances: knowledge checkKnowledge check · 16 questions
7. 7.Tax depreciation basics: US MACRS and Section 179, UK capital allowances: practical exerciseKnowledge check · 1 question
8. 8.Final exam10 questions · passing it completes the course, so people who already know the material can test out

Sources it draws on

The lessons and questions are written from these references, so learners can go back to the original.

• IRS Publication 946 (2025), How To Depreciate Property: placed in service, MACRS property classes and conventions, Section 179 limits for 2025 and 2026, special depreciation allowance, listed property and recapture (US federal)
• IRS: Tangible property final regulations, de minimis safe harbor FAQ ($2,500 / $5,000 per invoice or item) (US federal)
• GOV.UK: Claim capital allowances, overview (plant and machinery, types of allowance, cash basis) (UK)
• GOV.UK: Claim capital allowances, what you can claim on (plant and machinery, integral features, fixtures, leased items) (UK)
• GOV.UK: Claim capital allowances, annual investment allowance (£1 million, short periods, date of purchase, private use) (UK)
• GOV.UK: Claim capital allowances, 100% first-year allowances (UK)
• GOV.UK: Claim capital allowances, full expensing and 50% first-year allowance (companies only) (UK)
• GOV.UK: Claim capital allowances, 40% first-year allowance (from 1 January 2026) (UK)
• GOV.UK: Work out your writing down allowances, rates and pools (main pool 14% from April 2026, special rate 6%, single asset pools) (UK)
• GOV.UK: Work out your writing down allowances, work out what you can claim (pool calculation, private use, small pools allowance) (UK)
• GOV.UK: Capital allowances when you sell an asset (disposal value, balancing charges and allowances) (UK)
• GOV.UK: Expenses if you're self-employed (capital allowances under traditional accounting; cash basis treatment) (UK)