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Snippets: Global tax rates
Inland Revenue made the headlines end of April 2023 with the release of its report on the amount of tax paid by our high-wealth individuals (HWIs). The findings were that HWIs’ overall effective tax rate when taking into account all sources of income, including unrealised capital gains, is 8.9%. The Treasury simultaneously released a number
Trust distributions and tax rate change
Using a trust to manage and protect a family’s business and personal assets has been a common practice in New Zealand. However, with the recent increase in the amount of information required to be supplied to Inland Revenue, and now the Government’s decision, as part of its 2023 Budget, to increase the trust tax rate
Environmental correctness
The call for action regarding climate change and mitigating man’s negative impact on the planet is not new. However, there has been a shift in the last few years. It has moved from being a focus of ‘greenies’ and the ‘young’ to being accepted by the mainstream population as something that can no longer be
Deductibility of holding costs for land
On 31 March 2023, Inland Revenue released a draft interpretation statement (PUB00417) addressing the deductibility of land holding costs – namely, interest, rates and insurance – and the relevance of whether the land is taxed on disposal. This had been an area of uncertainty since the introduction of the residential bright-line provisions in 2015, which
Flooding events tax concessions
In response to the adverse weather events that hit in January and February this year, a number of tax concessions were released on 14 March 2023 in an attempt to provide some relief to those who were impacted. The events have been collectively given the legislated name “North Island flooding events”, which has been defined
From My Desk: May – July 2023
Greetings, The government has finally decided that we are in recession. The people (Tax payers) knew this, way before Christmas and were starting to adjust their spending habits – less lattes, less haircuts (I have been saving on those since 1/1/2000). You can see the impact of this now in the cities as mortgage interest
Snippets: Marginal tax rates
In New Zealand, a marginal tax rate system is used to tax an individual’s income, i.e. the tax rate increases as one’s income increases. As at today, the marginal tax rates are as follows: Taxable income bracket Applicable tax rate $0 to $14,000 10.5% $14,001 to $48,000 17.5% $48,001 to $70,000 30% $70,001 to $180,000
Snippets: Private school donations
Private schools will typically be registered as a charity. As such, parents will sometimes treat payments to the school as a charitable donation for tax purposes. Inland Revenue are making it clear on its interpretation on this subject through the release in October 2022 of QB 22/09 – Income Tax – Payments made by parents
Provisional tax regime
In New Zealand the provisional tax regime is designed to help taxpayers manage their income tax obligations, by requiring certain taxpayers to pay tax in instalments throughout the year, instead of one large lump sum at the end of the year. This regime applies to taxpayers who have residual income tax (RIT) of greater than
IRD – Whether a subdivision was subject to income tax and GST
In November 2022 Inland Revenue issued TDS 22/21, a Technical Decision Summary on whether the profit from a subdivision was subject to income tax and GST. TDS 22/21 covered a dispute involving a subdivision by the taxpayer of land into two lots. The taxpayer had acquired the property for the purpose of renovating and expanding
Residential property – A class of its own
Despite recent reductions in property prices, there is little doubt that the passion New Zealanders have for investing in residential property will survive. However, the tax treatment of residential rental investments has increasingly become a tangled web of complexity due to changes in legislation over the past few years. It used to be that ‘mum
From my desk: February – April 2023
Greetings, Belated Happy New Year, we trust everyone had a lovely Christmas/New Year period and hopefully got to put their feet up for a bit. We hope that the recent weather events have not affected our clients too much. Recently we had wind, rain then sunshine and an earthquake – Crazy! If you were badly
