Better Business
Issue Forty
This month:
What's New?
Did you know?
What's New?
Inland Revenue Department - Audits
The Government has budgeted for increased funding of $119 million to Inland Revenue Department to facilitate additional auditing of taxpayers and their businesses.
In a recent announcement the Inland Revenue Department have said their audit activity will target the "hidden cash economy".
Trust Administration
Poor trust administration may lead to serious problems for both trustees and beneficiaries evidenced by the following:
- Trust Minutes not completed - Trustees should authorise by a signed minute adoption of the annual financial statements and tax returns, distributions to beneficiaries, borrowing of funds, the purchase and sale of assets, investment strategy, and other important transactions. Failure to do so may lead to disputes between trustees and beneficiaries and expensive litigation.
- Lease documentation not on file and current - Trustees may own property that is leased to a trading company. If up to date lease documentation is not on file the leasing arrangement could be challenged by the Inland Revenue Department or an unhappy beneficiary.
There were two main changes to the depreciation rules that were released in the May 2010 budget:
- The elimination of the 20% loading for new assets purchased after 20 May 2010.
- The elimination of depreciation on buildings that have an expected life span of 50 years or more (generally residential rental properties and office blocks) beginning at the start of the 2011/2012 income tax year. This would be the 1 April 2011 for most tax payers in New Zealand.
The changes mentioned above will have the greatest impact on tax payers with residential rental properties.
Overseas IncomeNew Zealand tax residents are taxed on their worldwide income and thus are required to declare all their income, including all income earned from outside New Zealand. The Inland Revenue Department has announced that they will be focusing on New Zealand tax payers with undeclared overseas income and investments. The Inland Revenue Department will be targeting offshore bank accounts, superannuation, and life insurance.
Did you know?
Did you know that the government has announced its firm intention to abolish Gift Duty. At this stage this will be effective 01 October 2011.
Did you know that the company tax rate is changing as of 1 April 2011 (Year ending 31 March 2012).
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
