News
Tax pooling
Inland Revenue (IRD) charges a high rate of interest on late tax payments (currently 8.22%), and in some circumstances the complexity of the provisional tax regime makes interest charges hard to avoid. Add on late payment penalties, and the cost of meeting your tax obligations starts to feel punitive. Tax pooling was introduced in 2003 … Read more
Payments to shareholders
Broadly speaking, a payment from a company to a shareholder is likely to be a salary / wage or a dividend, and therefore taxable income. However, loans from a shareholder to a company and therefore loan repayments are also commonplace. Whilst interest on such loans is taxable to the recipient, loan repayments should not be. … Read more
Charities Working Group
The Department of Internal Affairs (DIA) is currently leading a comprehensive review of the Charities Act. With more than 27,000 registered charities in New Zealand and annual total spending of more than $17 billion, the sector forms a significant part of our economy. The current Charities Act was enacted in 2005, providing a governance structure … Read more
Tax Working Group
The Tax Working Group (TWG) released its long awaited Final Report (‘the Report’) on 21 February 2019, following a 13 month review during which the Group received over 7,000 public submissions. The report contained 99 recommendations for the Government’s consideration; including the introduction of a broad Capital Gains Tax (‘CGT’). Two months later the coalition … Read more
Winding up a Company
If a company does not file its annual return with the Companies Office, it may be struck off from the Companies Register. This is sometimes used as a ‘short-cut’ method, rather than completing the short-form company liquidation process. However, this approach comes with some risks, for example, if a company is struck off the register … Read more
When is a Gift not a Donation?
If an individual pays “…a monetary gift of $5 or more…” to a charity they are able to claim 1/3rd of it back from Inland Revenue (IRD). Prior to 1 April 2008, individuals could only claim donations of up to $1,890, i.e. a refund of $630. The coalition Government at the time removed this limit … Read more
GST and Land Sales
In 2011 the GST Act was amended to prescribe that a supply of land between two GST registered parties was subject to a rate of 0% if the land was to be used by the purchaser to make taxable supplies and not as a principal place of residence. Given the change reduced the GST rate … Read more
You Versus your Trust
You versus your Trust It is common from a layman’s perspective to not appreciate the relevance of treating separate legal entities as separate. Where expenditure is incurred to derive income, it is typically deductible for income tax purposes to the person that derived the income. Documentary evidence should be held that reflects this connection to … Read more
R&D tax incentive – framework confirmed
The Government has now released draft legislation prescribing how its R&D tax credit will operate. The key incentive is the introduction of a 15% R&D tax credit (increased from 12.5% in the draft proposals) applying to maximum expenditure of $120m, equating to a potential tax credit of $18m. Businesses can apply to exceed this expenditure … Read more
Engagement
Modern HR practice considers people managers to be at the forefront of the employee experience, with employee engagement stemming directly from an employee’s relationship with their manager. It is often said that people don’t leave companies, they leave managers. Hence, the ability for organisations to foster an employee experience leading to loyalty, retention, and business … Read more
