The Wish-List

by Shawn O’Grady
3 Minute(s) to read

The Wish-List

Lets keep an eye on the Government's wish-list of tax policies over the next three years and see how effective they’ve been getting their policies adopted. 

I will be reviewing their wish-list on a six monthly basis.

Given no one policy is common across the three parties it will come down to negotiations as to what polices get to see the light of day.  

The tax policy wish-list of the new Government includes:

Labour

  • Reverse National's tax cuts that were to take effect from 1 April 2018
  • Extend the bright-line test to 5 years
  • Remove the ability to offset rental losses against other income (phased in over 5 years)
  • Set up a Tax Working Group to consider introducing a capital gains tax from 2021
  • Re-introduce the R&D tax credits
  • Remove secondary tax rates
  • Allocate a further $30m to IRD to crack down on multi-national tax avoidance
  • Look at introducing a Diverted Profits Tax for multi-national companies
  • Introduce a regional fuel tax in Auckland
  • Introduce a royalty on the commercial consumption of water
  • Introduce a $25 levy on international visitors

NZ First

  • Establish inflation adjustment for PAYE tax thresholds
  • Remove secondary tax
  • Remove GST from basic items and the non-service component of Council Rates
  • Review the double-taxation of 'tax-like' instruments
  • Treat seismic strengthening as R&M
  • From 1 April 2019: reduce company tax rates over 3 years to 25%; introduce a tax on export income; increase the low-asset threshold to $20k; introduce R&D tax credits

Greens

  • Introduce a capital gains tax

 

A New Trusts Act for New Zealand

Trusts are an important part of New Zealand society and the economy. It’s estimated there are between 300,000 to 500,000 trusts in New Zealand.

Parliament is now considering the Trusts Bill, (It’s currently in its first reading) which will update and improve the general law governing trusts for the first time in more than 60 years.

The Bill will provide better guidance for trustees and beneficiaries, and make it easier to resolve disputes. Generally, the proposed reforms seek to clarify core trust concepts, make trust legislation more useful, fix practical problems and reduce costs. It also aims to modernise outdated language and concepts.

 

Some of the changes include:

  • help people understand their rights and obligations
  • mandatory and default trustee duties (based on established legal principles) to help trustees understand their obligations
  • requirements for managing trust information and disclosing it to beneficiaries (where appropriate), so they are aware of their position
  • flexible trustee powers, allowing trustees to manage and invest trust property in the most appropriate way
  • provisions to support cost-effective establishment and administration of trusts (such as clear rules on the variation and termination of trusts)
  • options for removing and appointing trustees without having to go to court to do so.

Given that changes are a foot, perhaps this might be an opportunity for you to review your family trust. 

 

HAVE WE GOT YOU THINKING?

 

Give us a call on (04) 563 6965 or email: dennis@taxman.co.nz or shawn@taxman.co.nz

Keep an eye out for First New Year’s article!

 

TAX DATES TO REMEMBER

  • 20th December. 2017 - monthly employers PAYE payment…
  • 15th January. 2018 - Bi monthly GST Return for Aug/Sep 2017…
  • 15th January. 2018 - Second instalment of 2018 Provisional Tax…

 

The staff at Dennis O’Grady Limited wish you a safe and happy time over the Christmas Holiday period.

We are closed from 22 December 2017 and will re-open on 8 January 2018.