Tax
Tax due diligence when buying or selling
The summer break is a time for reflection on the year that has been. For business owners, this break is an opportunity to evaluate their future strategy and consider whether it is time to exit, or conversely, grow by purchasing someone else’s business. Whether buying or selling, it is a demanding exercise. A business sale … Read more
Where is this going?
On 2nd December 2020, legislation was introduced by the Government that increased the top personal marginal tax rate to 39% on income over $180,000 from the start of the 2021/22 income year. Three other changes were included in that legislation. It introduced: new information-gathering powers for the purpose of tax policy development, a new requirement … Read more
New Tax Legislation
On 9 September 2021, the Government introduced the Taxation (Annual Rates for 2021-22, GST and Remedial Matters) Bill (“the Bill”) into Parliament, containing over 100 tax amendments. Changes of note are summarised as follows. One significant amendment is in relation to purchases from associated persons. Under current law, if a GST registered person (‘the purchaser’) … Read more
The 39% Rate Change
The top personal marginal tax rate increases to 39% on income over $180,000, with effect from 1 April 2021. Businesses should consider what the flow-on effects are and forward plan to ensure they are not caught off guard. Two key areas are discussed in this article. Simplistically put, a company pays income tax at 28%. … Read more
New Trust Annual Requirements
In December 2020 the legislation enacting the new 39% tax rate was passed. Within the same bill, somewhat overshadowed by the rate change, was the introduction of a new “annual return” requirement for trusts. Not to be confused with the new Trustee Act that came into effect at the end of last month which requires … Read more
Election Outcome and Tax Policies
After Labour’s victory in the 2020 General Election, their proposed tax policy changes are now likely to be implemented. Labour has ruled out a capital gains tax and an increase in fuel taxes but is prepared to introduce a Digital Services Tax to target multinational digital businesses who have taken advantage of tax structuring options. … Read more
What is revenue?
“Revenue means the total amount of money a business has earned from its normal business activities, before expenses are deducted” (Work & Income, July 2020). This core definition has been applied by thousands of businesses to apply for the Government’s wage subsidy scheme that was implemented due to the COVID-19 pandemic. Whether a 30 percent … Read more
Other tax changes in response to Covid-19
In addition to the tax loss carry-back scheme, the New Zealand Government has introduced a number of other tax changes to assist businesses and individuals to get through COVID-19. Currently, if an asset is purchased for less than $500 it does not need to be depreciated. The cost is immediately deductible in the year of … Read more
Carry back of tax losses
Ordinarily, if a taxpayer incurs a tax loss within a particular year, they are able to carry that loss forward and offset it against income derived in a future year, thereby reducing the taxpayer’s future tax payable. As part of the Government’s Covid-19 response, on 30 April 2020 legislation was passed under urgency which allows … Read more
GST issues paper
On 24 February, Inland Revenue released an Officials’ Issues Paper seeking feedback on various GST issues. A long-standing rule that has proved a source of frustration for those affected applies to transfers of goods between associated persons. The issue is highlighted in the following example. Joe buys a block of land on the edge of … Read more
