Disposals
When disposing of motor vehicles subject to the depreciation cost limit the balancing charge will be calculated using the original cost of the vehicle as the 'cost on acquisition'.
| Field | Description |
|---|---|
| Disposal date | Only dates in the current year, or substituted accounting period may be entered. Enter the date in the format DD-MM-CCYY. |
| Consideration | Enter the proceeds on sale of the asset. |
Adjustments on Disposal
| Field | Description |
|---|---|
| Assessable | This represents the assessable balancing adjustment of an asset on disposal and is calculated as follows: Where:
This field is only calculated if the disposal amount is greater than the undeducted cost. If this amount is not applied as a Balancing adjustment to a replacement asset, then you must allocate the balancing adjustment on sale to the relevant income label in the return so that it is included in assessable income. See below for Balancing adjustment (on disposal). |
| Deductible | This represents the deductible balancing adjustment amount on the disposal of an asset and is calculated as follows:
Where:
This amount is only calculated if the undeducted cost is greater than the disposal amount. |
| Capital gain/loss | This field will calculate the capital gain or loss on the private use portion of assets that were disposed of during the year. It is calculated as:
Where:
This calculation is not done for assets in a general small business pool, Motor Vehicles, personal use assets or collectables. The amount does not integrate to the return and any capital gain or loss must be entered at the Capital Gains item in the return or into the Capital Gains worksheet (g). |
| Balancing adjustment | Either an Assessable balancing adjustment or a Deductible balancing adjustment may be calculated on disposal of the asset. Tax provides for the allocation of that assessable or deductible amount in the disposal dialog. Select the schedule or item that the amount should integrate to from the list on the right-hand side of the dialog. For disposals on or after 21 September 1999, this offsetting function is only available to small business taxpayers using the simplified depreciation rules. If you elect to offset the assessable balancing adjustment against a replacement asset, you should enter that amount in the CY balancing adjustment field when creating the replacement asset so that the value for depreciation is correctly adjusted. |
