When an acquisition is partly for taxable or GST-free supplies and partly for private purposes or input taxed supplies, the claimable (extent of creditable use) part is limited to the part used for taxable or GST free supplies.
That part or proportion is based upon the planned use (i.e. a prediction) at the time of acquisition.
Taxpayers need to monitor the actual use and make adjustments on an annual basis. So if use of any one of the four “things” above differs sufficiently from the planned use, the “extent of creditable purpose” must be notified.
The number of periods to monitor is:-
|$1,000 or less|
$1,001 to $5,000
$5,001 to $499,999
$500,000 or more
Whilst no effort is made here to explain the rules, this is an area that you will need to alert your adviser, because they are unlikely to have a reason to ask you.
The use of a motor vehicle can be a good example, if business use changes in one of the future periods.