The Trump/Harris showdown last week was pure theatre and no doubt is a prelude for much more debate to follow. It seems to me that Kamala Harris brings a dynamic to the election that was previously missing (youth!); some fascinating watching to come in this space.
Choosing the Right Entity for Investments
Extension of the 39% tax rate to trusts prompts the question, what is the optimal choice of entity for your investments? It also brings very much into the spotlight the benefit of the 28% rate enjoyed by PIEs and tax exemption granted to PIEs for gains on NZ shares and shares listed on the ASX.
Issue 48 - June 2024
Topical events over the last month have been plentiful; the Budget of course has headlined, and so has the state of the economy, the impact of high interest rates on it and the collapse of iconic Smith & Caughey.
Issue 47 - MAY 2024
The trustee tax rate now matches the top 39% personal tax rate. In some cases, this may prompt a decision to wind up the trust, perhaps because the advantage offered by the trust no longer outweighs the increased tax costs and pronounced reporting and compliance steps.
Issue 46 - November 2023
It feels like the end of the year has been overtaken by two fabulous world cups and an election. Some lovely weather has been a Godsend too.
Nonetheless there continues to be plenty of activity, most of it positive – not so if you are exposed to prevailing high interest rates, or having to compete in the supermarket business! As usual, what follows is a snapshot of items that have crossed my desk in the last 2 or 3 months (hence topical). I hope you find them of interest.
Issue 45 - August 2023
Aren’t political wavering fascinating. First, David Parker commissions the high net wealth information gathering request as a platform to support a capital gains tax. Then the Greens Party press for this to be extended to a wealth tax. Chris Hipkins evinces his concern at voter reaction by dismissing both a capital gains tax and a wealth tax. Grant Robertson and James Shaw are left fuming and David Parker asks to be removed as Minister of Revenue. Fascinating.
Issue 44 - March 2023
The recent collapse of Silicon Valley Bank, the 18th largest bank in America, has provided another dent in financial markets, the Bond Market already in freefall as interest rates continue to climb. The Bank’s collapse rather highlights the need for a government guarantee on bank deposits and perhaps that will be one positive to emerge…
Issue 43 - November 2022
Yesterday, the Reserve Bank increased the official cash rate (OCR) by 75 points in what was a record individual rate hike. This pushes the OCR up to 4.25% and is a response to continued high inflation (7.3% in Q2 and 7.2% in Q3)…
Issue 42 - August 2022
I recently attended a presentation given by a leading economist with one of the trading banks. It was a fascinating presentation, hence I thought I might share the thrust of it with you…
Trusts – Guidelines To What You Should and Should Not Do In Designing and Using a Trust
This paper sets out dos and don’ts for New Zealand domestic trusts, particularly family trusts that own the family home and/or the family operated business…
Issue 41 - May 2022
Challenges against decisions of trustees arise in a wide number of areas. I discuss here two alternative bases for challenging a trustee’s decision, namely argument that the decision is ill considered and not in the best interest of the trust and secondly, based on a trustee’s conflict of interest…
Issue 40 - February 2022
Most topical at the moment, it seems, is the effect that the new lending rules in the Credit Contracts and Consumer Finance Act (CCCFA) is having on the housing market…
Issue 39 - November 2021
It is tempting to offer observations on the Auckland centric lockdown. I refrain from doing so in preference for discussing some important events in the corporate, tax and trust areas…
Design of the Interest Limitation Rule
Since my last newsletter, Inland Revenue has helpfully issued a set of questions and answers that are designed to assist understanding of the interest limitation rule for residential investment properties…
Issue 38 - August 2021
Observations from my desk are that the last few months have delivered increasing focus on the housing crisis and introduction of tax changes in response to it…
Issue 37 - March 2021
The Trusts Act has now passed into law, the Court of Appeal decision in the Mainzeal (Jenny Shipley director’s liability case) is now imminent, the Supreme Court has granted leave to appeal for Frucor in its avoidance case and Eric Watson has announced his intention to write a book….
Trusts Act 2019 - A Guide to Modernising your Trust
The advantages offered by trusts are far reduced from what they used to be. For many, there is no longer any need for a trust at all. I encourage you to assess whether…
Issue 36 - November 2020
A year dominated by an unforeseen pandemic with unprecedented economic turmoil, the NZ political scene tipped on its head with farmers strategically voting Labour in order to fight off unwanted Greens policies…
Shareholders Extracting Assets from Privately Owned Companies
To what extent can shareholders of a privately owned company extract assets from the company and thereby remove them from potential exposure to the company's creditors…
Is your Trust still Needed
The advantages offered by trusts are far reduced from what they used to be. For many, there is no longer any need for a trust at all…