The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill was introduced into Parliament in June 2018. The Bill seeks to improve tax administration and modernise the revenue system by making tax “simpler and easier” for individuals. However, the majority of the proposed improvements are heavily reliant on the success of the […]
Proposed tax changes Read More »
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
Reimbursing allowances Read More »
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
Bright-line breach warning Read More »
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
Ring-fencing rental losses Read More »
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
Loss Offsets and Subventions Read More »
The Labour coalition made immediate changes when they were elected into government, starting with repealing National’s planned tax bracket changes. Labours new ‘mini-budget’ is intended to benefit low-income earners, middle-income families with children and lift children out of poverty. The package entails: Increasing the Family tax credit by between $575 to $1,400 per year. Increasing
Mini-budget – Families Package Read More »
When an asset, such as a bach or a boat, is used both privately and to generate income, prescriptive rules exist within the Income Tax Act that determine the extent to which a tax deduction is available. Expenses broadly fall into three categories: fully deductible, non-deductible and apportioned. An expense is fully deductible if it
Traddies have been under the watchful eye of Inland Revenue (IRD) for the last few years since being identified as a cash-dominated industry in 2012. A media campaign has recently been launched to warn tradespeople that doing ‘cash jobs’ may comprise tax evasion, and that every cash job leaves a trail (or lack of a
Voluntary Disclosures Read More »
Tax innovation With the persistent need for additional Government revenue it could be time to look to history for answers. In 1535, King Henry VIII of England introduced the first ‘Beard Tax’ on males growing facial hair. The effectiveness of the tax in England was questionable, with records at the time being somewhat ‘short’ on
Snippets: Aug – Oct 2017 Read More »
Budget 2017 presented a broad range of small yet smart changes that target working families and low income earners. From a tax perspective, the key changes are predominantly to the income tax thresholds, working for families’ package and the independent earner tax credit. All taxpayers will benefit from the tax cuts, and it is hoped
