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Investment Boost is a new optional deduction available to New Zealand businesses when they purchase new capital assets for use in their business.
Businesses can accelerate the depreciation of these assets by taking an upfront 20% deduction of the cost of new assets in the year of purchase. Standard depreciation can also be claimed on the residual (base) after the Investment Boost deduction.
Investment Boost applies to the purchase of most new business assets that are depreciable for tax purposes – common examples include machinery, equipment and work vehicles. Investment Boost also applies to newly imported used assets and the purchase of new commercial and industrial buildings – that do not currently allow depreciation deductions.
Normal depreciation deductions apply
Note any private use adjustment (deduction can only be claimed on business proportion), and FBT remains payable on full cost
The deduction for new investment assets generally reduces an asset’s adjusted tax value (or equivalent).
Just like depreciation, some or all of the deduction may be recoverable if the asset is disposed of (or deemed to be disposed of) and the consideration is more than the asset’s adjusted tax value. Separate rules apply for assets that are not depreciable property.
To find out if your business assets qualify for Investment Boost and how to maximise your tax benefits, get in touch with our experts.
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