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  • Assets held when GST registration cancelled

    If you cancel your GST registration and you still hold capital assets on which you've claimed GST credits, you have to repay some of the credits. You do this my making an increasing adjustment on your final activity statement. The increasing adjustment takes into account the market value and percentage of business use of the assets at the time your GST registration is cancelled.

    The GST payable is:

    1/11 × market value of the asset × percentage of business use

    Example: Calculating an increasing adjustment

    Mr Sample ceases business and cancels his GST registration. He has a motor vehicle on hand that has a market value of $22,000. Mr Sample claimed GST credits for this motor vehicle in an earlier activity statement. The vehicle is used 80% for business purposes.

    The GST payable by Mr Sample is:

    (1÷11) × $22,000 × 80%

    = $1,600


    End of example

     See also:

      Last modified: 24 May 2017QC 16711