Value of goods taken from stock for private use: expert commentary

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The Commissioner recently issued his annual determination TD 2021/1 (the Determination) which provides an update of amounts that the Commissioner will accept as estimates of the value of goods taken from trading stock for private use by taxpayers in named industries for the 2020–21 income year.

Many small businesses find it difficult to determine the value of the goods taken from stock for private use. This difficulty is compounded by saleable goods containing a range of ingredients, such as in the case of a bakery, as the assessable amount is not the market value of the saleable item taken for personal consumption but the cost of the individual ingredients.

As an administrative concession for certain industries, the Commissioner publishes each year the amounts that he will accept as an estimate of the value of goods taken from trading stock for private use. This concession relieves these taxpayers from having to track individual stock items for this purpose. It also allows them to retain a deduction for the purchase of the trading stock even though some of it was used for private use, provided they return the amount of the estimate of goods for private use in their assessable income.

Our Senior Advocate, Robyn Jacobson, CTA, has identified some key issues for tax practitioners to be aware of when using these estimates when working with companies, trusts, sole traders and partnerships.

Access the commentary

Members: We sent you the member-exclusive PDF containing the ATO schedule for the value of goods taken from trading stock for private use in the 2020–21 income year and accompanying commentary from Robyn in your TaxVine newsletter on 22 January 2021. You can also easily access it at any time through your member portal.

Non-members: This commentary is part of our member advocacy work, available to members of The Tax Institute. Not a member yet? No problem! You can sign up for a free 2-month trial membership, which will allow you to download Robyn’s commentary and access all the other benefits of membership for a full 2 months. That includes:

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