If you take an item for your private use, you need to:
- account for it as if you had sold it
- include the value of the item in your business's assessable income.
There are 2 ways you can value this stock. You can either:
- keep records of the actual value of goods you take from your trading stock for your own private use and report that amount; our Law Administration Practice Statement explains how to value goods – see PS LA 2004/3 (GA) Trading stock: valuation of goods taken from trading stock for private use by sole traders or partners in a partnership, or
- use the amounts we provide as estimates of the value of goods you have taken (updated annually); these are available in Taxation Determination TD 2022/15 Income tax: value of goods taken from stock for private use for the 2022–23 income year.
Example: recording the value of goods taken for private use
John runs a grocery store. At the end of each week, he takes food from his grocery store for his wife and 3 children.
John records the value of these goods and reports the amount as income in his business accounts. His records include:
- the date
- a description of what was taken
- the reason stock was taken
- the cost or market value of the item (excluding GST).