All articles
Update – GST on Farmhouses and Holiday Homes
In 2017 Inland Revenue released an Interpretation Statement, IS 17/02, which formalised the long-standing practice of allowing a farmer to claim a portion of their farmhouse expenditure on the basis it is the “headquarters” of the farm. But then in 2020 Interpretation Statement IS 20/05 was released by Inland Revenue which overthrew the common practice … Read more
The employees’ market
In today’s workplace environment, expectations around employee benefits are changing, with the norm shifting in the employee’s favour. For many, the days of a 9-5 workday and mandatory workplace attendance are a distant memory, to the point where flexible hours and working environments are considered a bare minimum. As the war for talent has evolved, … Read more
Are Technical Decision Summaries the key to information transparency?
Inland Revenue has started publishing Technical Decision Summaries (TDS’) from mid-2021. A TDS is an abridgment of either an adjudication or private ruling decision made by Inland Revenue’s Tax Counsel Office (TCO). TDS’ will be published within three months of a technical decision being finalised. They are not binding and are for information use only, … Read more
Rollover relief – Does it go far enough?
Residential property acquired after 27 March 2021 is subject to a 10-year bright-line period, or 5 years if the property qualifies as a ‘new build’. The extension to 10 years has increased the likelihood that a property transfer will be caught. In an attempt to alleviate the risk that related party transfers would be unfairly … Read more
Attribution vs market salary rules
The introduction of the 39% tax rate for individuals who earn over $180,000 from 1 April 2021 has reignited Inland Revenue’s interest in the income attribution and market salary regimes. These rules currently prevent a person from having income earnt from individual efforts or “personal services” taxed through an associated entity at a lower tax … Read more
An introduction to the metaverse
No physical interaction, no leaving your home, talking to people over the internet – a COVID nightmare, or the future of our society? The metaverse is a topic that has gained a lot of traction recently, particularly with Facebook’s rebranding to ‘Meta’ and its announcement that it will now be especially focused on creating its … Read more
Changes to trust disclosures
Two changes have recently surfaced in relation to trusts and the disclosure of trust information. Firstly, the Tax Administration (Financial Statements—Domestic Trusts) Order 2022 was made on 7 March 2022. This Order sets minimum standards for financial statements prepared by trusts. The Order applies to income years ending on or after 31 March 2022 and … Read more
Is it a ‘New Build’?
On 30 March 2022, the Taxation (Annual Rates for 2021-22, GST and Remedial Matters) Act 2022 received Royal assent. Its passing into law brings with it the extension of the residential bright line period from 5 to 10 years and denial of interest deductibility for residential investment properties. The legislation itself is complex and difficult … Read more
Taxation of capital
In March 2022 Inland Revenue released a government discussion document that contains a proposal that represents a further erosion of the principle that New Zealand does not tax capital gains. Currently, if a person sells shares in a company and the shares were not purchased with the intention of resale (such as by a share … Read more
Farewell to “tax invoices’’
Despite significant technological and operational business changes, the rules regarding GST tax invoices have remained largely unchanged since GST was first introduced in 1986. However, new legislation was passed on 29 March 2022 that is intended to improve and modernise GST invoicing and record-keeping requirements. A long-standing requirement to be able to make a GST … Read more
