Private use of stock, samples and giveaways NZ

What a GST private use adjustment is

IRD’s claiming GST page is blunt: you claim input tax only to the extent goods and services are used in your taxable activity to make taxable supplies. You cannot claim GST for private use or for making exempt supplies.

When goods start as business stock or materials and later become private, you usually reverse the GST you already claimed. IRD describes that as a change in use. Paper filers still use the GST adjustments calculation sheet IR372 and copy totals into Box 9 (output adjustments) or Box 13 (credit adjustments). In myIR the same numbers sit in the adjustments fields. Broader claiming rules sit in claiming GST NZ and the Business and Expenses GST category.

Taking trading stock for your own use

A butcher taking steaks home, a cafe owner using shop milk, or a retailer dressing from the rails is a classic drawing. For income tax, IRD’s disposing of trading stock page treats stock taken for your own use as if it was sold at market value, unless a listed exception applies. Tax Technical item QB 14/01 confirms the income tax adjustment and notes that a GST registered person may also need a GST adjustment.

For GST, the job is to reverse the input tax you claimed on those goods. Officials’ GST commentary treats private use as a change in use: the GST you deducted is clawed back. That is not the same number as the income tax deemed sale. Income tax looks at market value. GST looks at the tax you already claimed on the purchase.

From 1 April 2024, income tax no longer always forces market value on every cheap or free disposal. IRD lists exceptions for disposals to persons who are not associated, in the normal course of business, where you can show a business reason, and for disposals to approved donee organisations. Those are income tax exceptions. They do not give you a free pass to ignore GST if the goods left the taxable activity for private use.

Samples and promotional giveaways

Handing a tester, a branded sample pack, or a free product to the public as advertising is usually still part of making taxable supplies. Officials’ GST writing on free supplies in the course of a taxable activity says the supplier’s input tax on those goods is generally left in place. You are not “taking stock home”. You are using stock to sell more stock.

IRD’s entertainment expenses page treats some promotional freebies as 100% deductible for income tax, for example branded stationery promoting the business, provided the public has the same access as staff or associates. Give those same freebies only to employees or people associated with you and the income tax treatment can drop to 50%, with a matching GST entertainment adjustment. Food and drink gifts that the recipient enjoys privately (a bottle of wine with a car sale is IRD’s example) are in the 50% entertainment bucket. Detail sits in GST on entertainment expenses.

A gift of money or an unconditional donation is a different animal again. Pure donations are not a GST supply. If you want brand placement instead, that is sponsorship and you need taxable supply information. See GST on sponsorship vs donations.

Giveaways to staff, family and associated persons

Who receives the goods changes the tax. Keep these three paths separate:

• You or your household: private use of business goods. GST output adjustment. Income tax drawings at market value unless an exception applies.
• Associated persons (family companies, relatives, trusts as defined): GST often uses market value on associated supplies. See associated persons GST.
• Employees: companies and employers registered for FBT generally do not make a private use adjustment on the GST return for employee perks. They make a GST adjustment on the FBT return for fringe benefits that are liable for GST. Sole traders, partnerships and trusts can still need a private use adjustment if the owner or associated persons use business goods privately. IR375 spells that split out.

A staff Christmas hamper of shop stock is not a customer sample. Treat it as entertainment, FBT, or both, depending on who enjoys it and how it is provided.

Annual or period by period: which GST return?

IR372 still headings “Private use of business goods and services for annual or period by period adjustments”. That label is why people search it. Current IR375 and the live IRD pages split the timing like this:

• Stock, materials, or other goods applied to private use in a period: adjust in that GST return. Do not wait until 31 March if you already know the drawings.
• Mixed use assets over $10,000 GST exclusive: change in use reviews are annual, in the GST return that aligns with your balance date. Number of review years depends on cost. Full table: GST change of business use.
• Goods and services $10,000 or less GST exclusive: after the first claim (principal purpose or apportionment), IRD says you do not make later change in use adjustments even if private use shifts.
• Entertainment: GST adjustment once a year, 15% of the GST exclusive amount that is not deductible for income tax. Show it on IR372 under entertainment and copy it to Box 9.

Holiday homes, boats, and aircraft have their own mixed use day counting. That is not a shop stock problem. Use GST on mixed use assets for those. Vehicles and home office percentages are in claiming GST on a car or home office and GST on motor vehicles.

Private assets used for business, and the old $18,000 figure

The other direction is bringing a private asset into the taxable activity: a personal laptop that becomes the shop till, a home freezer used for catering stock, a car that starts doing deliveries. IRD’s GST adjustments for business, private and exempt use page says goods may be purchased for the business or already owned goods may be introduced into the business. You then claim based on taxable use.

From 1 April 2023 the live thresholds are GST exclusive:

• $10,000 or less: principal purpose method (all or nothing) or apportionment. If you choose apportionment you must use it for all such goods and services for at least 24 months. No later change in use reviews.
• Over $10,000: you must apportion on a fair and reasonable estimate of business use (including how the item is available to use). Then review annually for the number of adjustment periods IRD lists.

Searches for “private assets used for business costing less than $18,000” come from the still published IR372 (August 2010) credit line. That sheet also still mentions 12.5% GST in places. Do not treat $18,000 as the 2026/27 GST threshold. IR375 (March 2026) and the live IRD adjustment pages use $10,000 GST exclusive.

You also cannot invent a GST credit on a private purchase that never had GST, or where you hold no records. Secondhand goods from an unregistered seller have their own calculated credit. Keep evidence as in GST record keeping.

How to calculate the GST figure

For stock taken privately, the usual working paper is the GST you claimed on those goods. If the GST inclusive cost was $230, GST is $30 using IRD’s 3÷23 (see GST maths NZ). That $30 goes in as an output adjustment in the period you take the goods. The free GST calculator will split inclusive amounts the same way.

IRD’s change in use adjustments page is for mixed use assets whose actual taxable use later differs from the intended use. You skip that annual review if GST exclusive cost is $10,000 or less, or if the change is under 10% and the adjustment is $1,000 or less (with a separate small exempt supplies de minimis). A wash up formula applies if use changes permanently. That is the capital asset path, not the weekly shop drawing path.

Worked examples

Example 1: Stock taken home. A GST registered cafe buys milk and bread as trading stock and claims full GST. In August the owner takes goods that cost $115 including GST for the household. GST on that cost is $15 ($115 × 3 ÷ 23). Include $15 as a Box 9 style output adjustment in the GST return that covers August. For income tax, also record drawings at market value unless an IRD exception applies.

Example 2: Customer samples. A skincare maker gives 40 testers to walk in customers during a Saturday promotion. The testers were bought to make taxable supplies and are used as advertising. That is not private use. Leave the GST claim in place. Keep a note of quantity and reason so a reviewer can see it was promotion, not drawings.

Example 3: Family giveaway. The same maker boxes leftover product for relatives at Christmas. That is private or associated use, not a public sample. Reverse the GST claimed on those units in that GST period, and think about associated persons valuation if a related entity is involved.

Example 4: Private laptop introduced to the business. A contractor starts using a $2,000 GST exclusive laptop (principal purpose now taxable, occasional private use). Under the principal purpose method for goods $10,000 or less, IR375’s Phil example allows a full GST claim on a business laptop with occasional private use. If the principal purpose is still private, principal purpose gives a nil claim; apportionment would let you claim only the business percentage, locked in for 24 months for all such purchases.

Do not mix these $10,000 rules

Some accounting blogs talk about a $10,000 stock on hand concession at year end. That is an income tax closing stock shortcut for some smaller traders. It is not a GST private use rule, and it is not the GST $10,000 principal purpose threshold. Using the wrong $10,000 in a GST return is a common muddle.

When you cancel GST registration, assets you keep for private use usually need a market value style deemed supply in the final return. That is a one time exit adjustment, covered in cancelling GST registration, not a weekly stock drawing.

Common mistakes

• Claiming full GST on purchases, then taking stock home with no Box 9 adjustment.
• Treating family giveaways as “marketing samples”.
• Using the old $18,000 IR372 figure instead of the live $10,000 GST exclusive tests.
• Waiting until the annual return to adjust drawings you already know about each period.
• Using income tax market value as the GST figure (or the GST clawback as the income tax figure).
• Confusing employee FBT plus GST on fringe benefits with owner private use.
• Skipping records: date, cost, quantity, and whether the goods went to customers, staff, or the household.

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FAQs

Do I need a GST private use adjustment if I take stock home?

Yes if you claimed GST when you bought the stock and then use it privately. Inland Revenue treats that as a change from taxable use. You reverse the GST you claimed, usually in the GST return for the period you take the goods.

Are promotional samples and giveaways private use for GST?

Usually no, if they stay inside your taxable activity, for example product samples handed to the public to promote sales. Input tax generally stays. Giveaways to yourself, family, or associated persons are private or associated supplies and need a different GST treatment.

Is private use of business goods annual or period by period?

It depends what you are adjusting. Stock taken for personal use is usually adjusted in the GST period you take it. Change in use reviews for mixed use assets over $10,000 GST exclusive are annual, in the GST return that aligns with your balance date. Entertainment GST is once a year.

Do private assets used for business still use an $18,000 one off GST credit?

No. That $18,000 line is an old IR372 label. From 1 April 2023 Inland Revenue uses a $10,000 GST exclusive split between the principal purpose method and apportionment, with no later change in use reviews at or under $10,000.

Is the $10,000 stock on hand income tax concession the same as the GST $10,000 rule?

No. The income tax closing stock concession for some smaller traders is a different rule. The GST $10,000 GST exclusive figure is about how you claim and later review mixed business and private use of goods and services.

Last verified 30 August 2026 against Inland Revenue GST adjustments for business, private and exempt use, change in use adjustments, claiming GST, disposing of trading stock, entertainment expenses, GST guide IR375 (March 2026), IR372, QB 14/01, and the Goods and Services Tax Act 1985. Ads may fund this free site. Not Inland Revenue. Not tax advice.