TalkTax

In May 2010 the Taxation (Budget Measures) Act 2010 did away with tax deductions for depreciation on buildings with an expected life of 50 years or more. That in itself had many taxpayers and their advisors shaking their heads in dismay. However, imagine the impact it has on companies with large property portfolios. This latest amendment to the tax law has resulted in many companies having a deferred tax liability.

The effect of these deferred tax liabilities is that companies’ accounts may not reflect a “true and fair view” and may be misleading for investors because even though it affects the net profit, it does not have any relevance to the performance of the company per se.

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Outstanding tax lawyers to be recognised in New Zealand’s ‘client choice’ awards

TAX LAWYERS now have their own separate accolade at the premier awards for the New Zealand legal profession, with the introduction of the CCH Tax Law Award for the upcoming 2010 New Zealand Law Awards™ (Law Awards). Now in its sixth year, the New Zealand Law Awards™ recognise the “cream of the legal profession” and are the highlight of the local legal calendar as the only event in New Zealand that celebrates and rewards excellence in client service by law firms and barristers as judged by their clients, and by in-house legal teams as judged by their legal peers. Read more

I recently received an invoice from the Wellington City Council for the first quarterly rates instalment for the 2010/2011 year. Enclosed with the invoice was a slip advising of the upcoming increase in GST rate and suggesting that ratepayers could save themselves some money by paying the remaining three rates instalments before 1 October if they can afford to do so. We thought it would be interesting to put this to the test with some back-of-the-envelope calculations. Read more

…and so the battle continues between a tax “genius” and the IRD. Since the 1980s, Mr J G Russell (Mr Russell) has been involved in legal disputes with the IRD over various schemes designed to reduce liability for income tax on companies he consulted to. The IRD claims that he owes millions of dollars in back taxes, which has since grown, with penalties and interest, to a whopping $138m. Read more

Submissions on the Governments proposals for the taxation of QCs and LAQCs closed at the beginning of this week.   We can see no justification for repealing the qualifying company (QC) regime.  The proposed reforms should be confined to loss-attributing qualifying companies (LAQCs).

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New Zealand’s company tax rate will be lower than Australia’s, after new Australian Prime Minister Julia Gillard today announced that the Australian corporate tax rate would not be cut below 29 percent.

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This blog considers the likely consequences if Gift Duty were to be abolished.  The Government has recently announced that such a move is being considered.  Every practitioner should be aware of this possible shift, as it is likely to have an impact on just about every individual they advise. The Government has said that a period of consultation will be undertaken, and if Gift Duty is to be abolished, the proposal will be contained in a Bill to be released in November 2010.

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The appeal in Penny and Hooper has been decided in favour of the Commissioner in a 2:1 majority decision of the Court of Appeal released on 4 June 2010.

In the first instance the decision could be considered to have been rendered largely nugatory for the time being given the recent reduction of the top marginal rate to that of the trustee rate. However, with the new company rate now significantly below these rates, the matter of below market salaries will likely be a live issue for some time.

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Received anonymously:

The Rewrite Advisory Panel (RAP) was established to advise rewriters of the Income Tax Act 1994. The Income Tax Act 2004 saw the RAP becoming the arbiter on possible unintended legislative changes and the Income Tax Act 2007 saw it becoming the overseer of the clarity of that Act (see: www.rewriteadvisory.govt.nz)

In 2009, a submitter raised with the RAP the definition of ‘revenue account property’ (the second RAP referred to in the title but, to avoid confusion, I do not use that acronym in this note). The submitter said:–

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