News
GST on loan repayments
The recent High Court decision of Burke v Commissioner of Inland Revenue (2019) is a timely reminder that understanding the legal form of a transaction is important for applying the correct GST treatment. Mr Burke was a GST registered, self-employed contractor, who renovated houses and buildings. In mid-2006, Mr Burke entered into a venture with … Read more
Purchase price allocation
Buying or selling a business is a significant decision, and commonly involves vendor and purchaser negotiations on many aspects of the transaction. The price is often one of the first points to be negotiated. Irrespective of whether the transaction is for shares in a company or its underlying assets, a single amount is typically agreed. … Read more
Property sales – business premises exclusion
The land taxing provisions deem certain sales of land to be subject to income tax, subject to a limited number of exceptions. One such is exception is for ‘business premises’. However, the circumstances in which it applies can be a grey area. Hence, two recent ‘Questions We’ve Been Asked’ (QWBA) issued by Inland Revenue (IRD) … Read more
Generation Z – our future workforce
The rise of Generation Z (‘Gen Z’) is imminent in today’s workforce. Comprised of those born between mid-1990s and early-2000s, Gen Z has grown up in a world with technology at their fingertips. Common traits include: confidence, desire to succeed, thriving on recognition, being adaptable and tech-savvy. However, their most valuable aspect is they represent … Read more
Court case – tax avoidance arrangement
Two recent (connected) cases at the Taxation Review Authority (TRA) demonstrate that unnecessarily complex transactions can raise a red flag for IRD. Both cases related to a taxpayer referred to as Mr Brown, who acquired a 2/3 interest in a joint venture known as the NPN Partnership (NPN) back in 1981. NPN held several residential … Read more
Corporate governance for small businesses
Good corporate governance is often viewed as important for large companies with an established board of directors. However, the principles that underpin good corporate governance can benefit any organisation, irrespective of size. Why is it then that the term governance often raises alarm bells with small business owners? Perhaps it’s the fear of losing control … Read more
Finicky Bothersome Tiresome (FBT)
Fringe Benefit Tax (FBT) on privately used vehicles is neither new nor rare. However, errors in FBT calculations are common due to the murky and complicated nature of the rules and principles that apply. Generally, FBT is payable when a business-owned vehicle is available for private use by an employee. The availability component of this … Read more
Residential bright line
The Income Tax Act 2007 has long contained provisions to tax the sale of property (or other assets) acquired with the intention of disposal. However, ‘intention’ is a subjective concept and has been difficult for Inland Revenue to police. Hence, the brightline test, (section CB 6A) was introduced as a means to tax profits made … Read more
Working remotely
In recent years, we have seen many businesses shift away from traditional office spaces and make the move to an open plan work environment. Whilst open-plan offices have been credited with boosting collaboration, breaking down hierarchies and encouraging conversation, new research suggests that working remotely can be a great way to increase productivity and boost … Read more
Saving time and cost with tax
Various tax concessions exist that can save significant time and money, but they are often overlooked. You may want to save this article as a handy reminder to take advantage of these options whenever possible. Business-related legal fees are tax deductible irrespective of whether they are capital in nature, provided the total amount for the … Read more
