Review of New Zealand foreign trusts
The Mossack Fonseca document leak and the major media backlash that followed has been well publicised. However, it remains unclear what role New Zealand plays in the international tax avoidance scandal and how the Government might legislate to tighten up the current rules.
An independent enquiry of our foreign trust rules has been commissioned by the Government. The enquiry will review the foreign trusts’ disclosure rules on record-keeping, enforcement and the exchange of information with other tax jurisdictions, to determine whether the rules are fit for purpose or if there are any improvements that can be made. The report will be headed by Mr John Shewan and is due by June 30 of this year.
A separate review of the privacy protection provided under tax legislation is also underway with the Government looking to scale back New Zealand’s privacy protections to allow more sharing of taxpayers information. Tax secrecy has traditionally been considered necessary to encourage the compliance of taxpayers, however, the Government is exploring the possibility of allowing the IRD to share more information to improve their internal processes and to prevent tax evasion.
Creative tax deductions
The deduction was denied on the grounds that his son was seven and a half years old and did not in fact provide secretarial services to his father. The judgement found that the man’s son:
“did virtually nothing for his father by way of secretarial assistance or anything of that nature. Indeed, the evidence established no more than that the son sometimes ran upstairs to the study when the phone was ringing, answered the phone and then handed it to his father.”
The Judge also made the comment that it was quite likely the son was paid some modest amounts of pocket money, however, those amounts would have been completely unconnected with the “minimal” work that he did for his father.
Change of Address
With 1st June fast approaching, it is a timely reminder to all who are on the move, to ensure you advise us of your new address. This includes informing the IRD and to those of you who hold a firearms licence, you must notify the Police within 30 days of moving as per Section 34 Arms Act 1983.