baotThe boat or aircraft is a mixed use asset if:

  • during the income tax year it is used for both private use and income-earning use, and it is also not physically used for 62 days or more, and
  • It had a cost or market value of $50,000 or more when purchased.

Private use of your mixed use asset means:

  • use by you, your family or associated people whether you received income from the asset or not.
  • non associated people, if you receive income at less than 80% of market rates.

Income-earning use of your boat or aircraft means use by a non-associated person who pays you at 80% or more of normal market rent.  Income earning days include time you spend, either occupying or using the asset to:

  • repair damage to the asset, provided the damage occurred during income-earning days and isn’t normal wear and tear.
  • relocate the asset, provided you are paid to do so.

Merely taking the boat out to test new sails/motor or fix normal wear and tear, is not an income earning day.  Such use counts as private use.


As you can see, it is really important that you keep a good detailed logbook for your boat or aircraft that records:

  • Date of use
  • Number of flying hours (if an aircraft)
  • Who used the asset (owner or other)
  • If not the owner, who was the skipper or pilot
  • What the use was
  • If you received payment, and if so, was it at least 80% of normal market rent
  • If you have more than one mixed used asset you need to keep separate records for each

When we have this information we can then do the ”mixed use asset” calculations to apportion the tax deductible expenses for the purposes of your tax return.

If the IRD claim there is more private use than declared, the onus is on you to prove them wrong.

If you have any questions, please contact our tax specialist Peter Forrest, or any of the other directors.  You can also refer to our August 2013 newsletter for a fuller description of the mixed assets rules.

Author: Pat Bright

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