A non-profit body can't claim a GST credit for expenses involved in supplying donated goods and services.

Example

A charity that runs an opportunity shop selling only donated clothing can't claim GST credits on the shop expenses, such as rates, electricity or maintenance. In this case, if this was the charity's only activity, it would not even register for GST. However, if it also sells purchased goods, a GST credit may be claimed on the expenses that directly relate to those goods. All other expenses must be apportioned between the exempt and taxable supply use.

Financial services

Financial services include the following:

• paying or collecting any amount of interest
• mortgages and other loans
• bank fees
• securities such as stocks and shares
• providing credit under a credit contract
• exchanging currency (for example, changing US$ into NZ$)
• arranging or agreeing to do any of the above (for example, mortgage broking)
• financial options
• deliverable future contracts
• non-deliverable contracts.

Financial planning fees cover the various types of fees charged by financial advisers for financial planning services they provide. These are initial planning fees, implementation fees, administration fees, monitoring fees, evaluation fees, replanning fees and switching fees.

• Services relating to initial planning fees, monitoring fees, evaluation fees and replanning fees are subject to GST.
• Services relating to implementation fees, administration fees and switching fees are financial services and exempt from GST.

Renting a residential dwelling

GST can't be charged on the rent for a residential dwelling. A landlord can't claim any GST on dwelling expenses, such as maintenance, rates and insurance. If a residential dwelling is sold as part of a taxable activity, and it was rented for at least five years beforehand, the sale is an exempt supply.