Category Archives: Tax Talk

Reimbursing allowances

On 3 April, Inland Revenue issued a draft ‘Questions we’ve been asked’ (QWBA) covering the tax treatment of allowances and benefits paid or provided to farm workers. A key principle covering such payments centres on the tax treatment of ‘reimbursing allowances’ – this is relevant not just to farm workers but all employees. Reimbursing allowances…
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Bright-line breach warning

The bright-line test came into force from October 2015, introducing rules that a profit derived on the sale of a residential property is subject to tax if sold within two years of purchase, albeit subject to some exceptions such as the family home. These rules have recently been revised to extend the bright-line period from…
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Ring-fencing rental losses

Labour’s pre-election manifesto proposed to increase the fairness of the tax system and improve housing affordability. In the six months since the Labour-led coalition entered Parliament, we have started to see some changes filtering through. As part of the proposals aimed at house prices, Inland Revenue has recently released an Issues Paper proposing to ring-fence…
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Loss Offsets and Subventions

The loss offset (and subvention payment) mechanism allows a ‘profit’ company to reduce its taxable income by utilising the tax losses of a ‘loss company’. The mechanism is a great tool that is commonly used. Before a loss offset can be made, the following key requirements must be satisfied: The loss company must have maintained…
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