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Interest Deductibility Changes on Rentals and 6 ways to manage the change

Currently when owners of residential investment property calculate their taxable income they can deduct the interest on loans that relate to the income from those properties (claimed as an expense). This reduces the tax they need to pay....

April 23, 2021

COVID-19 Wage Subsidy March 2021

New Zealand businesses who have had or expect to have a 40% decline in revenue over a consecutive 14-day period between 28 February and 21 March, compared to a typical 14-day period between 4 January and 14 February 2021 (6 weeks before the change in alert levels), may be able to get it.Businesses with highly seasonal revenue will be able to compare their decline in revenue to the same period of 14 consecutive days in 2020 or 2019.This is available to businesses throughout New Zealand.The subsid...

March 15, 2021

COVID-19 Wage Subsidy

New Zealand businesses who have had or expect to have a 40% decline in revenue over a consecutive 14-day period between 28 February and 21 March, compared to a typical 14-day period between 4 January and 14 February 2021 (6 weeks before the change in alert levels), may be able to get it.Businesses with highly seasonal revenue will be able to compare their decline in revenue to the same period of 14 consecutive days in 2020 or 2019.This is available to businesses throughout New Zealand.The subsid...

March 11, 2021

Second COVID-19 Resurgence Support Payment (RSP)

The COVID-19 Resurgence Support Payment (RSP) is now available for business that experienced a 30% reduction in income from the 28th February 2021 to the 6th March 2021. A business or organisation must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to the increased COVID-19 alert level.  This decrease in revenue or capital-raising ability is compared with a typical 7-day revenue period in the 6 weeks prior to the inc...

March 11, 2021

Bright-Line IR833 Form

The Bright-Line test applies if you brought and sold a property within 2 years. Any gain less any expenses is taxable and adds to your taxable income in that year.When your annual tax return is completed, you are required to file a IR833 form, gains will be taxed in that year, losses can only be offset against other property gains in that year. The 2 years was later revised to 5 years see the diagram below for the dates. There are a couple of exceptions one is to exclude...

November 18, 2020

Small Business Cashflow Loans - Changes Announced Nov20

IN BRIEF The Government announces a three-year extension of the application time for the Small Business Cashflow Loan Scheme, and a doubling of the interest free period.Applications for the scheme were due to close at the end of 2020.Other changes include repayment provisions and what loans can be used for. The first Cabinet decision of the new Labour Government was a three-year extension of the Small Business Cashflow Loan Scheme, and a provision of up to two years interest free, to support sma...

November 13, 2020

Support Local Electricity Stations & Charities

The Central Lakes Trust (CLT) supports charities in Central Otago, the main source of income is from Pioneer Energy which is 100% owned by CLT. The power company owns the Teviot Hydro Scheme and Roaring Meg and other power stations. If you would like to support local charities and local power generation change select Pioneer Energy. Here is a link to the central lakes trust website so you can see the charities they support.https://www.clt.net.nz/ Here is a link to Pioneer&nbs...

August 6, 2020

New rules for reporting residential property income/losses

From the 2019-20 income year onwards, you can now only claim deductions up to the total amount of income you earn from your residential rental property. You can no longer use excess deductions from your property to offset other income such as salary and wages. Most residential properties are subject to the new residential property deduction rules (also known as the ringfencingrules). The rules do not apply to some residential properties such as your main home and residential prope...

June 5, 2020

COVID-19 – Tax loss continuity example

Currently, if more than 33% of the shareholding changes the losses of a company are forfeited, what is being proposed is that this is reduced or removed for equity changes. Here is an example provided; A start-up firm, Conference in the Clouds Limited (CIC) offers microphone and webcam software. It has been making large losses in recent years. However, it now wants to scale up significantly, given that more people are working from home and using videoconferencing. Despite its promising early-de...

May 22, 2020

COVID-19 – Loss carry-back scheme

If your business was making a profit the in 2019/20 (2018/19) and now you are forecasting a loss in the 2020/21 (2019/20) year you can “move” some/all of that loss into the previous year and reduce the tax that you paid for this year and get it refunded. Here is an example provided; Wiki Hospitality Limited (Wiki) has had a profitable year for the year ended 31 March 2020. It has not yet finalised its tax return, but it is expected to return $2m net income. Its final provisional tax payment ...

May 22, 2020

COVID-19 Wage Subsidy Extension- from 10 June 2020

From the 10th of June businesses can apply for the Wage Sudsidy extension.  The Criteria has changed from the initial 12 week one; Your Revenue for the last 30 days must be 40% lower than the same period last year ie 10th of May 2020 to 10th Jun 2020 compared to 10th May 2019 to 10th June 2019.It will cover 8 weeks per employee from the date you submit your application.It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy.You'll need to agree t...

May 22, 2020

COVID-19 Small Business Cashflow Loans

The Small Business Cashflow (Loan) Scheme (SBCS) has been introduced to support businesses and organisations struggling because of loss of actual or predicted revenue as a result of COVID-19. They must have 50 or fewer full-time-equivalent employees. Inland Revenue will administer the payments and repayments of this scheme. Applications will be open until 24th July 2020. Eligible businesses and organisations are entitled to a one-off loan. The maximum amount loaned is $10,000 plus $1,800 per ful...

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