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Tax Facts - Depreciation Allowances

Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income.

Generally, you must claim depreciation on fixed assets used in your business that have a lifespan of more than 12 months. However, in special circumstances you can elect not to depreciate an asset by applying to Inland Revenue.

Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be depreciated.  From 1 April 2011, depreciation allowances on most building structures could no longer be claimed, although depreciation could still be claimed on a wide range of commercial and industrial building fit-out assets.   

Changes in 2020 reintroduce depreciation deductions for non-residential buildings for the 2021 and subsequent income years. For more information, please click here.

Keep a fixed asset register to show assets you will be depreciating. This should show the depreciation claimed and adjusted tax value of each asset. The adjusted tax value is the asset's cost price, less all depreciation calculated since purchase.

To view the depreciation rates and the methods for calculating depreciation, please refer to the IRD Depreciation Guide.

To find out more on how to calculate depreciation on a business asset please give us a call or refer to the IRD Depreciation Rate Finder on the Inland Revenue website.
 

Supplied by CCH Business Fitness NZ

Client in the Spotlight

Roberts Tree Surgeons Ltd

Paul and Kelly Roberts started their business Roberts Tree Surgeons from scratch 12 years ago. Today the company is a strong team of 10 full time staff. Roberts Tree Surgeons are the one-stop shop for tree removal, tree maintenance and tree planting.

The majority of their work is tree and garden maintenance of private clients and large infrastructure clients...

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Meet our Team

Callum Thompson

What is your current role at Graham & Dobson?
Audit Manager

Tell us a bit about your family
Married to Tracey, with two dogs...

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What our clients say...

  • Parihohonu Station has been involved with Graham and Dobson since the early 1900s. They have proved to be of great value, producing a high standard of quality work, are trustworthy, astute, and approachable any time at all. The staff are very friendly and will bend over backwards for us. We always recommend this long established firm unequivocally.

    Avianne and Nigel Faram

  • We are grateful for the enormous amount of support the staff of Graham & Dobson provide. They have demonstrated a high level of understanding, knowledge and financial direction and deliver a consistent service in structured, efficient timeframes. This is a company with high integrity and strong values focusing on providing the utmost levels of customer satisfaction.

    Gisborne Stroke Support Group Inc.

  • Graham & Dobson helped me start my own business in 2007. Without their help and support the process would have been a lot harder. They offer excellent on-going support and advice.

    Karl Platten - Lawns Plus Ltd (GreenAcres)