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HEADING: The Bright-Line Property Rule

By Paul Sheehan, Chartered Accountant

In this article I want to talk about some of the new tax legislation.

The Threshold for Self Corrections of Minor Errors has Increased

Taxpayers will be able to self correct errors in a tax return up to $1000. Previously the threshold was $500.Applies from 1 April 2017

RWT Exemption Certificates Will Automatically Renew

Individuals wishing to be exempt from resident withholding tax being deducted from their income will no longer have to apply annually for an exemption certificate.Although the IRD will still have the right to issue exemption certificates for a limited period. Applies from 1 April 2017.

GST Changes

GST on Capital Raising Costs

Businesses will be able to claim GST on costs of raising capital by the zero rating the following financial services:

-the issue or allotment of a debt or equity security or renewal.

- the payment of an amount under a debt or equity security whether it

be interest,dividend or principal.

-the provision or variation of a guarantee of the performance of obligations for one of the above.

Applies 1 April 2017

The Time of Supply When Consideration is Not Known

Normally the time of supply is when the payment is made or an invoice is issued. When the total consideration is not known the new rules will allow the total consideration to be treated as more than one supply. So the supplier will account for GST as the consideration becomes known. These new rules come will come into effect as soon as legislation is passed.

Second Hand Goods Claim for Gold,Silver and Platinum

The definition of second hand goods is to be expanded to include goods that are manufactured for sale to the public and contain precious metals such as gold,silver and platinum.

Services in Connection with Land

The government is expanding the GST net to make more services subject to GST for land supplies to non residents.

Currently services for land in New Zealand are zero rated where the they are supplied to non residents who are outside New Zealand at the time of supply. Under the new rules the services will be subject to GST when they are:

-directly in connection with land or an improvement to the land that is located in New Zealand, and

-In connection with land or an improvement to the land, located in New Zealand and are intended to enable or assist a change in the physical condition, ownership or other legal status of the land or improvement.

Applies from 1 April 2017.

You should contact yourchartered accountant or financial advisor before making a financial commitment.

  • Paul Sheehan is a chartered accountant. Phone 355 2636 for more information.