All employers in New Zealand, no matter their size, will be able to use 90-day trial periods, with effect from Saturday 23 December 2023. Previously, 90-day trial periods only applied to employers with fewer than 20 employees. This provision has been extended and is available to all employers. Any employer can provide a new employee with an offer of employment which includes a trial period. A trial period must be agreed to by the employer and employee in writing, and in good faith, before the employee starts work, as part of an employment agreement. There are a number of ‘must-dos’ in any empl ..read more

Cryptocurrency? Bitcoin? The blockchain? Did you dive in as an early uptaker or are you still getting used to the terminology? From the start, the cryptoasset sector has attracted people fascinated with emerging technology and keen to explore its potential for wealth creation. Inland Revenue has released guidance on various aspects concerning cryptoassets and taxation and we expect to see more over time. There may be tax consequences resulting from cryptoassets when: receiving them as payment for goods and services using them to pay for goods and services buying and selling cryptoassets ..read more

It’s tax season – which also means it’s tax scam season. Unfortunately, savvy scammers know that Kiwis expect to receive correspondence from Inland Revenue over the next few months. So the scammers create emails or texts that appear to have come from Inland Revenue (IR) to con people out of money. These emails (or calls) can be highly convincing, so it’s important to stop and think before you share your details. Recently a BNZ customer received an email purportedly from Inland Revenue telling her she was owed a tax refund. She clicked the link, chose her bank, and entered her details. That in ..read more

Your business should be one of your biggest assets – but what’s it actually worth? Whether you want to sell your business, adjust the ownership, borrow, or calculate your net worth, a business valuation can be extremely useful. Earnings and assets The two most important value drivers of your business are earnings and assets. These are the main selling points – strength of earnings and/or valuable assets will make any business more attractive. Other intangible factors can play a part in adding value, like goodwill and potential. These can definitely make a business more saleable, but they aren ..read more

A new build that received its code compliance certificate after March 27, 2020 is exempt from the tax rules which limit deductibility on interest payments against rental income. That means you can own a new house and continue to get a tax advantage for 20 years by being able to claim tax deductions on mortgage interest payments against your rental income. This also applies to purpose-built rentals. You can read more about the new build policy here. There are now many advantages to buying a new build, including lower initial deposit requirements and more financial support for first-home buyers ..read more

For rental properties that make losses, owners can no longer offset those losses against other sources of income such as salary or wages. However, owners can carry those losses forward and use them against future income or profits from that property. If you own more than one rental property, you can choose to offset deductions for a specific rental property against income from other rental properties in your portfolio, essentially calculating your overall profit or loss across your portfolio. Or you can elect to use a property-by-property basis. DOWNLOAD THE GUIDE TO RING-FENCING RENTAL LOS ..read more

For properties purchased on or after 27 March 2021: the bright-line test was extended from 5 to 10 years, except for new builds, where the test period is still 5 years. Inland Revenue now issues a letter as soon as they are aware of a potential bright-line transaction, usually within a month of the transaction. the current bright-line test exemption for the main home changed, making them subject to a ‘change of use’ rule. Under the original rules, if the property had been used as the person’s main home for over half of the relevant bright-line period, there was a complete exemption from t ..read more

The Government introduced legislation to limit interest deductibility for residential property investments. From 1 October 2021: for properties acquired before 27 March 2021, interest deductions on loans will be phased out at 25% per year over 4 years, until 31 March 2025 for properties acquired after 27 March 2021, interest will not be deductible (unless the property was acquired by an offer made on or before 23 March 2021 that could not be withdrawn before 27 March 2021) The focus is on residential investment properties which can be used for long-term accommodation. Typically, this wo ..read more

Trusts now have new rules on disclosures. Previously, trusts have not needed to file financial statements or details of non-taxable transactions. This has now changed. Inland Revenue will now be collecting more information so it can keep a closer eye on how trusts are being used. Trusts now need to provide more financial information From April 2021 onwards, all annual returns for trusts will need to include: Financial statements Details of settlements Details of distributions, taxable or not Any other information required, like loans and transfers involving associated persons or relat ..read more

There are more than 100 tax changes that took effect this financial year, and some of them may be relevant to you. . Here’s a brief summary: Matariki is now a public holiday for tax purposes. GST for groups; importers and exporters; crypto assets; and record keeping. Some rates changed, including the minimum thresholds for ACC earners’ levies and student loan repayments. Trusts now have additional reporting requirements in place. Sales suppression software that alters EFTPOS sales data is prohibited. Working for Families tax credits were increased. Child support rules have be ..read more