Asset Threshold Changes

Greenlion News

Low Value Asset Threshold

You may remember in the wake of the first nationwide lockdown the Government made amendments to the Income Tax Act 2007 that increased the threshold for expensing assets in the year of purchase. That increase was temporary and we are fast approaching the date for another change in threshold.

The increase of the threshold amount from $500 to $5,000 (+GST for GST registered taxpayers) for assets acquired on, or after 17 March 2020 and before 17 March 2021 was introduced as a temporary measure to cushion the economic impact of the COVID-19 virus for the 2020–21 income year. For assets purchased on or after 17 March 2021, this threshold will become $1,000.

To be eligible for treatment as a low-value item, the asset must be of a separate nature. It cannot be an asset that was or will become part of another asset that is depreciable property. Another restriction is that the item cannot be purchased from the same supplier at the same time as other assets to which the same depreciation rate applies. That restriction might apply, for example, to the purchase of a set of tables and chairs where the total cost exceeds the threshold but the cost for each individual item does not. However, if the entire purchase costs less than $5,000 (or $1,000 after 17 March 2021), treatment as a low-value item continues to be available.

It may be necessary to recognise depreciation recovery income if a low-value item is sold or applied for private purposes. If the asset is sold, the entire sale proceeds are assessable income in the year in which the asset is sold. If the asset becomes a private asset, the market value of the asset when it is first used privately becomes assessable income.

Should you have any questions regarding the treatment of any assets you have acquired please do not hesitate to get contact your Greenlion Advisor. 

Greenlion News
December 1, 2021

Final Support before the ‘freedom’ of the traffic lights…

On Monday the Government announced the support available under the new COVID Protection Framework. They also announced that the final Wage Subsidy and Resurgence Support Payment are now available, along with a new Transition Payment. We have set out more details below.   Wage Subsidy – Round 8 The 8th round of the Wage Subsidy…

Greenlion News
October 22, 2021

The goal is 90% – here’s the support package

Todays announcement has certainly given us something to think about and to work towards.  If you haven’t already we do urge you to get vaccinated. Your action now could be the difference for some of our clients coming out with a business intact.  In todays announcement Minister Robertson has shared the path forward as we…

Greenlion News
September 30, 2021

Limitation of Interest Deductibility on Residential Property Investment Released

Earlier this week the Government released draft legislation outlining some detail in relation to the March interest limitation proposals.   The proposals are contained in Supplementary Order Paper No. 64. It is pretty dry and the devil is in the detail so please bear with us.    We have attempted concisely to summarise the key…