Avoid the disappointment of some business owners who found out after financing an asset purchase such as vehicles, computers, plant or equipment that the type of finance arrangement was not the most effective in ensuring the best GST outcome was achieved.
A hire purchase arrangement is an agreement where you can obtain goods by hiring them over the repayment term and the transfer of title to you is completed when you make the final payment of the agreement. A chattel mortgage (also known as an equipment loan) is a loan agreement where you take ownership of the asset at the time of purchase.
There are various options and possibilities for the way assets are financed, which can have particular GST implications at the time of purchase that might not be in your best interests.
Don’t get it wrong, call our office to discuss.
Lorraine Barrett, Business Services Manager