May 2019 Newsletter

Last month the Coalition Government rejected the Capital Gains Tax recommendations produced by the Tax Working Group.

Prime Minister Jacinda Ardern ruled out a capital gains tax under her leadership, saying that no consensus was able to be reached within the Government.

While she still believed it would make a difference, she acknowledged that Labour had now campaigned on it for three elections, and it seemed there was a lack of mandate among New Zealanders for the policy.

The Government, however, noted that they will explore options for taxing vacant land & conduct further review of the rules of taxing land speculators as a matter of high priority. The Government has also noted its intention to explore taxpayer friendly amendments. Some of these possible changes include:

On Business Taxation

  1. Change the loss continuity rules to support start-ups.
  2. Review the taxation of non-resident employees.
  3. Review the current GST requirements for contractors who are akin to employees.
  4. Adjust the thresholds for unexpired expenditure & for the write-off of low value assets.
  5. Reduce the number of depreciation rates and simplify the process for using default rates.
  6. Remove RWT on close company-related party interest & dividend payments.
  7. Increase the threshold for not requiring a GST change-of-use adjustment.
  8. Allow special rate certificates and certificates of exemption to be granted retrospectively.
  9. Increase the period of validity for a certificate of exemption or special rate certificate.
  10. Help small businesses reduce compliance costs through the use of cloud-based accounting software

Retirement Savings

  1. Encouraging savings of low-income earners.
  2. Refund the Employer Superannuation Contribution Tax (ESCT) for KiwiSaver members earning up to $48,000 per annum.
  3. his refund would be clawed back for KiwiSaver members earning more than $48,000 per annum, such that members earning over $70,000 would receive no benefit.
  4. Ensure that a KiwiSaver member on parental leave would receive the maximum member tax credit regardless of their level of contributions.
  5. Increase the member tax credit from $0.50 per $1 of contribution to $0.75 per $1 of contribution. The contribution cap should remain unchanged.
  6. Reduce the lower PIE rates for KiwiSaver funds (10.5% and 17.5%) by five percentage points each.
  7. Consider ways to simplify the determination of the PIE rates (which would apply to KiwiSaver).

If you have any legal matters that we can help with please do not hesitate to contact us to organise a time or to just discuss your matter over the phone. We are pleased to announce we have now settled into our new offices.

Kind regards

The Directors
P: 09 836 4099

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