All articles
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
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
