--- title: New Purchase Price Allocation Rules description: New tax rules for purchases image: https://blog.k3.co.nz/hubfs/IRD-logo%20(1).png --- [![K3 logo](https://blog.k3.co.nz/hubfs/K3%20-July2017/Images/logo.svg)](http://www.k3.co.nz/) - [Consulting](http://www.k3.co.nz/consulting/) - [Accounting](http://www.k3.co.nz/accounting/) - [Legal](http://www.k3.co.nz/legal/) - [Insights](https://blog.k3.co.nz) - [Contact](http://www.k3.co.nz/contact/) ![nex6ki-313241](https://blog.k3.co.nz/hs-fs/hubfs/Stock/nex6ki-313241.jpg?width=3344&name=nex6ki-313241.jpg "nex6ki-313241") # Welcome to the K3 hub Your home for all things consulting, accounting and legal. ## Latest Stories [![Jane Jung](https://blog.k3.co.nz/hs-fs/hubfs/Jane%20Jung.png?width=20&name=Jane%20Jung.png) Jane Jung](https://blog.k3.co.nz/author/jane-jung) Jun 16, 2022 ## [what happens if you die without a wil...](https://blog.k3.co.nz/what-happens-if-you-die-without-a-will) [Wills](https://blog.k3.co.nz/topic/wills) [![Richard Matson](https://blog.k3.co.nz/hs-fs/hubfs/Unknown-5-760036-edited.jpeg?width=20&name=Unknown-5-760036-edited.jpeg) Richard Matson](https://blog.k3.co.nz/author/richard-matson) Jun 08, 2022 ## [Business tips: Getting in control of ...](https://blog.k3.co.nz/business-tips-getting-in-control-of-your-spending) [![Ken Brophy](https://blog.k3.co.nz/hs-fs/hubfs/ken-527675-edited.jpeg?width=20&name=ken-527675-edited.jpeg) Ken Brophy](https://blog.k3.co.nz/author/ken-brophy) May 25, 2022 ## [What are we about and where are we go...](https://blog.k3.co.nz/what-are-we-about-and-where-are-we-going) [Consulting](https://blog.k3.co.nz/topic/consulting) [Organisational Design](https://blog.k3.co.nz/topic/organisational-design) [Business Strategy](https://blog.k3.co.nz/topic/business-strategy) [Organisational Change](https://blog.k3.co.nz/topic/organisational-change) [![Evie Bello](https://blog.k3.co.nz/hs-fs/hubfs/Evie%20Bello%20media.jpg?width=20&name=Evie%20Bello%20media.jpg) Evie Bello](https://blog.k3.co.nz/author/evie-bello) May 25, 2022 ## [Standard form small trade contracts: ...](https://blog.k3.co.nz/standard-form-small-trade-contracts-the-imposition-of-a-requirement-for-fairness) [Legal](https://blog.k3.co.nz/topic/legal) [Business - SME/Corporate](https://blog.k3.co.nz/topic/business-sme-corporate) ## Featured Stories Filter By Categories - [Legal](https://blog.k3.co.nz/topic/legal) - [Consulting](https://blog.k3.co.nz/topic/consulting) - [Video](https://blog.k3.co.nz/topic/video) - [Business - SME/Corporate](https://blog.k3.co.nz/topic/business-sme-corporate) [![Richard Matson](https://blog.k3.co.nz/hubfs/Unknown-5-760036-edited.jpeg)](https://blog.k3.co.nz/author/richard-matson) By [Richard Matson](https://blog.k3.co.nz/author/richard-matson) August 02, 2021 ## [New Purchase Price Allocation Rules](https://blog.k3.co.nz/new-purchase-price-allocation-rules)   [Legal](https://blog.k3.co.nz/topic/legal) [Accounting](https://blog.k3.co.nz/topic/accounting) [Setting up a new business](https://blog.k3.co.nz/topic/setting-up-a-new-business) [New Zealand investment](https://blog.k3.co.nz/topic/new-zealand-investment) [Tax](https://blog.k3.co.nz/topic/tax) As of 1 July 2021, Inland Revenue introduced the purchase price allocation (PPA) rules, which apply to the purchase of assets, such as commercial property, forestry land or a business.   Previously there has been no requirement for vendors or purchasers to agree on the allocated purchase price when buying and selling a business, land or buildings. Vendors and purchasers could adopt different positions in their tax return, thus being “mis-matched”.   The new legislation now means vendors and purchasers allocate purchase prices consistently for income tax purposes. Where the vendors and purchasers have agreed on how the sale price is allocated between taxable, depreciable, and non-taxable assets then, these values should be used for tax purposes.   In the absence of prior agreement between the parties, the new rules enable the vendor to set the PPA, provided they do so within three months of settlement. If the vendor does not have, or exercise that right, the purchaser has a right to determine a PPA within six months of settlement.   There are certain exceptions to the new rules: 1. total purchase price for the assets is less than $1 million or 2. the sale of residential land and chattels is exempt unless the purchase price is $7.5 million or more.   Get in touch with Richard Matson, or Jeff Walters for help in understanding the new PPA rules. We can ensure you understand the tax and legal consequences.   Richard Matson, Director, K3 Accounting: [Richard@k3.co.nz](mailto:Richard@k3.co.nz)   Jeff Walters, Director, K3 Legal: [Jeff@k3.co.nz](mailto:Jeff@k3.co.nz) ![](https://static.hubspot.com/final/img/content/email-template-images/placeholder_200x200.png) ### Subscribe Email ### Popular Stories [Common pitfalls in mortgagee sales for buyers](https://blog.k3.co.nz/common-pitfalls-in-mortgagee-sales-for-buyers) Jun 21, 2021 [Employment Disputes Process](https://blog.k3.co.nz/employment-disputes-process) Nov 21, 2019 [THE PRESUMPTION OF GIFTS](https://blog.k3.co.nz/the-presumption-of-gifts) Aug 08, 2017 ### Popular Tags [Legal](https://blog.k3.co.nz/topic/legal) [Consulting](https://blog.k3.co.nz/topic/consulting) [Video](https://blog.k3.co.nz/topic/video) [Business - SME/Corporate](https://blog.k3.co.nz/topic/business-sme-corporate) [Accounting](https://blog.k3.co.nz/topic/accounting) 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