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New rules for foreign superannuation

New tax rules to deal with interests in foreign superannuation schemes held by New Zealand tax residents were introduced by the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014, which was enacted on 27 February of this year. For information on these important changes see http://taxpolicy.ird.govt.nz/publications/2014-sr-foreign-superannuation/overview.

Also see NZ Tax Solutions,Issue 1, 2014,  Foreign Superannuation Update (CCH)

MIXED USE ASSETS – HOLIDAY HOMES, BOATS, ETC

Do you or your clients rent out a holiday home? If so, you need to know the new tax rules.

The hot topic in the tax world at the moment is mixed use assets. A mixed used asset is one that is used for both business and private purposes, but is also not actively used for a large part of the financial year. Common examples include holiday homes, boats, etc.

On 17th July 2013 the Tax bill relating to the latest Mixed Used Assets Expenditure rules was passed into law effective from 1st April 2013 onwards for holiday homes and from 1st April 2014 for other assets (ie. boats and aircrafts). Read more

Relying on Inland Revenue

Inland Revenue has released a draft statement for public consultation setting out the Commissioner’s view of the current law in relation to the status of different types of advice (other than binding rulings) that the Commissioner gives and the implications of reliance on it.

Situations where the Commissioner will take the view that advice he has previously given is incorrect include when:

  • a court decision clarifies the law and shows that the earlier advice is incorrect;
  • the Commissioner discovers an error in the earlier advice; or
  • the Commissioner reconsiders earlier advice and changes his view.

Read more

Imputation credits & resident withholding tax – reminder

As year-end is approaching quickly, it is important to remember that the maximum imputation ratio for dividends is 28:72 for the 2012 income year (previously 30-70 up to end of the 2011 income year). The Resident Withholding Tax (RWT) rate on dividends remains at 33 cents in the dollar meaning dividends are still taxed at 33% in the hands of the recipient (i.e. shareholder). RWT must be paid by the company for the imputed dividend shortfall. Read more

In an increasingly complex tax world, how do you stay out of trouble?

Tax headlines recently have reflected lengthy tax disputes, many which have been lost by the taxpayer. Inland Revenue has increased its focus on tax audits and this can leave many companies feeling nervous about their practices. Are you next? Read more

Tax Avoidance – it all comes down to statutory interpretation

In recent times, we have seen several tax cases being lost by Taxpayers. Analysing the judgments, I believe we have seen a fundamental move when dealing with tax avoidance – a move back towards statutory interpretation. The Newton and Elmiger cases are the policy basis for our anti-avoidance rule as they focus on statutory interpretation and I believe the courts are showing a move back to this ordinary approach (as can be seen in the Banks cases).

Read more

Penny and Hooper

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.

Read more

Penalty interest on breaking a fixed interest mortgage

Mortgage “break fees” or “penalty interest” is a cost that has become more common place in the current economic times. With the recession starting to bite and with some taxpayers owing large sums to the banks on fixed loans with comparatively high interest rates, decisions about breaking the fixed-rate term to get lower rates have to be made. Invariably decisions like this come with a cost as banks want to be compensated for the loss of revenue that they would have received relative to the higher interest rate.

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  • Joanne Martin: Hi Would you be able to email me to discuss a small company that is an LTC which I need some advice on...
  • Rizwana Saheed: You are on the right track that there is an exemption when employees work overtime but whether or not...
  • bryan: as a group of employees we get paid meal money if we exceed 11hrs on any day. Employer says he wants to tax...
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  • Twagilayesu Isaya: I agree with the author of this article that Inland Revenue Department need to provide clear...
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