GST (Goods and services tax) Te tāke hokohoko

In this section

## GST (Goods and services tax)

### Making additional GST calculations

GST adjustments from 1 April 2011

Calculate your GST adjustments before 1 April 2011

Calculate your provisional tax

Apportionment methods

Depreciation rates

GST on exempt, zero-rated, special supplies and receiving remote services

# Calculate a one-off adjustment of private assets used in business

### When to use it

You can make a one-off adjustment when:

• there is a change in the use of an asset costing less than \$18,000 from private to business, or
• a private asset costing less than \$18,000 is acquired but is sometimes used for the business.
##### Note

The adjustment is based on the estimated taxable use over the life of the asset.

### How to calculate it

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
1

Work out the percentage of business (taxable) use. Call this T.

25%

2

Work out the lesser of the:

• purchase price of the asset including GST, or
• current market value of the asset.

Call this figure L.

\$12,000

3

Multiply L by T.

\$12,000 x 25% = \$3,000.

4
• Divide the amount from Step 3 by 9. This is your GST adjustment.
• Show this GST adjustment on your GST adjustments calculation sheet (IR372) under "Private assets used for business costing less than \$18,000 (a one-off adjustment)".
• Transfer the totals to Box 13 on your GST return.

\$3,000 divide by 9 = \$333.33

### Private assets used in business costing more than \$18,000

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:

• you have previously made one-off input tax adjustments
• you have elected to make one-off output tax adjustments for any previous changes from business to private use, or
• you can prove that making period-by-period or annual adjustments is impractical.

We also take into account the nature of goods and services, for example an asset retained for a number of years, such as property.

##### Important

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.