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You can make a one-off adjustment when:
The adjustment is based on the estimated taxable use over the life of the asset.
The table below explains how to calculate the one-off adjustment for a private asset costing less than $18,000 used in business and provides an example.
Scenario: David, a farmer, buys a horse float for $15,000, intending to use it for 25% business and 75% private purposes. Its current market value is $12,000.
|Step||What to do||Example|
Work out the percentage of business (taxable) use. Call this T.
Work out the lesser of the:
Call this figure L.
Multiply L by T.
$12,000 x 25% = $3,000.
$3,000 divide by 9 = $333.33
You can apply in writing for a one-off input tax adjustment for assets costing over $18,000, where a 100% change of business use occurs, if:
We also take into account the nature of goods and services, for example an asset retained for a number of years, such as property.
If we approve an application for a one-off input tax adjustment and if the business use changes to private use, you must make a one-off output tax adjustment to reflect the private use.