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 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 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…
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….
Tax Rules for Related Party Debt Financing
Media attention has highlighted the extent to which large multi-nationals have historically escaped New Zealand tax on their earnings here…
Issue 35 - Newsletter - 6 March 2020
A raft of tax proposals herald the new decade, including rules to allocate the proceeds received upon sale of a business across the transferred assets…
December 2019 – Commercial and Tax Edition
Welcome to our final newsletter for 2019. In between distractions of school prize givings, end of year work functions and vexatious litigation (timed to create maximum impact), I trust you find the articles below of interest…
September 2019 – Tax Edition
Hybrid mismatch rules were introduced last year and will apply to many cross border financing arrangements...
March 2019 – Tax Edition
Eric Watson's Cullen Investment case and Frucor's tax avoidance case are profoundly interesting in their own right...
December 2018 – Tax Edition
Welcome to our final tax newsletter for 2018. Some of you may know that I have assisted the Law Society with submissions to the Tax Working Group (TWG)...
Tax Working Group (TWG) – Preliminary Report…
The TWG appointed by the Government primarily to assess whether or not New Zealand should introduce a capital gains tax appears to be unconvinced as to its merits. This newsletter summarises key findings in the TWG's preliminary report...
June 2018 - Tax Edition
The anti ‘base erosion and profit shift’ (otherwise known as BEPS) measures are soon to be implemented; officials are committed to introducing these measures into law by 1 July 2018, their target date...
March 2018 – Tax Edition
The Brightline test for residential property is to be extended from 2 to 5 years from later this month. The current 2 year period was criticised from inception as potentially too short and relatively easy to work around. With the extension, the ability to work the system, by sitting out the 2 year period will have gone.
August 2017 - Tax Edition…
Multilateral Conventions…
Timing of Associated Persons Test…
Taxation of Trusts…
Limited Partnerships as Hybrids…
Partnerships: Asset Contributions…