5 benefits of specialised valuations for plant and equipment

Increased exposure to tax risk is the key issue that arises for purchasers, due to the seller allocating values in the interest of reducing their own tax liability. These competing interests can lead to a purchaser’s future depreciation deductions, and corresponding tax savings, being more restricted. Often, this is a circumstance not realised until it’s too late. Not complying with these rules can lead to future penalties.

“It’s typically when clients are audited 3-5 years following their transactions that they’re consequently caught out and lumped with big tax bills,” explains Tony.

Do you know how long you can keep using your machinery before it will require repairs? A PPA can help. It’s a useful tool for estimating the remaining useful life of plant and equipment assets. Ascertaining this can help buyers plan for maintenance expenses, reducing the asset’s downtime and improving efficiency.

The challenges that can arise from an incorrect valuation highlight the importance of seeking independent, professional valuation advice early in the transaction cycle. 

Alongside the expertise of a global network and 35 years of local experience, JLL has New Zealand’s largest team of specialist plant and machinery valuers. This specific knowledge ensures all valuations and assumptions are representative of the industry, competition, and market conditions.

As one of the leading valuation firms, JLL can assess and determine fair PPAs and help you to understand all of the conflicting interests and tax implications pertaining specifically to plant and equipment acquisitions.