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Budget 2024 - Our View

The New Zealand 2024 Budget was handed down on 30 May at 2pm.

The Budget for 2024 demonstrates fiscal responsibility, provides long-awaited tax relief for 83% of New Zealanders, and allocates funds towards enhancing frontline public services for improved outcomes.

Rollover Relief or Grief?

The main change is that the bright-line period will now decrease from 10 years for existing properties or 5 years for a new build, to 2 years which applies to disposals on or after the 1 July. Rollover relief rules applying to bright-line transfers of residential land have also had a complete makeover, with the new criteria applying from 1 July.

De Facto Relationship or Not?

The Working for Families Tax Credit (WFFTC) is a notoriously complex scheme when it comes to determining eligibility and quantifying entitlement. This leads you to wonder how well the scheme is policed by Inland Revenue, and whether fraud is able to ‘fly under the radar’.

Beware of Deemed Dividends

The concept of what is a “dividend” is very broad and starts with the default proposition that any transfer of value from a company to a shareholder is a dividend. That concept includes the simple scenario of an interest free loan to a shareholder or a person associated to a shareholder; which can also include loans between companies.

End of Year Write-Offs

As increasing interest rates have bitten and with industry sectors such as retail and construction not performing as strongly, some businesses are struggling. As the end of the financial year approaches, now is a good time to assess whether any of your accounts receivable need to be written off as ‘bad’.

Trust Disclosure Regime

After the introduction of the Trust Disclosure rules in March 2022, in November 2023 Inland Revenue released a high-level summary (in the form of a 40-page report) of insights from the first year of reporting. While tax advisors and clients alike may have begrudgingly completed the disclosures initially, the statistics may prove to be interesting.

Covid Fraud

Given the necessity of providing fast relief, the wage subsidy scheme provided during COVID in NZ was largely based on trust. Today, MSD operates a Wage Subsidy Integrity and Fraud Programme aimed at ensuring the integrity of the payments and who received them.

Australia’s Tax System Compared

With the recent inflation driven surge in the cost of living, apparent increase in crime and seemingly constant complaints about the education and health systems, some New Zealanders are considering packing up shop and moving across the ditch to Australia.

Succession Planning for Legal Firms

Succession planning is an often underestimated yet critical component of a legal firm's long-term success. While legal professionals are primarily focused on providing exceptional legal services and growing their client base, it is equally essential to have a well-crafted succession plan in place.

39% Trust tax rate

On 18 May 2023, the government introduced the Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill. The Bill includes draft legislation that will see the trust tax rate increase from 33% to 39% from 1 April 2024, thereby aligning it with the top personal marginal tax rate.

Leaky home repairs concluded as not deductible

The leaky homes crisis represents one of the most severe problems faced by New Zealand’s property sector and continues to cause stress and anxiety for those affected. Adding to the uncertainty for rental property owners has been the question of whether repair costs are immediately deductible as ’repairs and maintenance’ (R&M).

Tax policy from two sides of the political aisle

Given that either Labour or National are likely to enter into coalition agreements of some form with the Green Party and Act, respectively, and the tax policies of the two main parties are more ‘vanilla’, it is worth reviewing the tax policies of the two minor parties as this is where unexpected change may come from.

Tax ourselves out of recession?

The buoyant covid subsidy funded days are behind us, New Zealand has entered a ‘technical’ recession. This was reinforced by the recent announcement that New Zealand’s corporate tax paid was almost 11% down in the 11 months to May relative to Government expectations.

The Power of Continuous Development: Staying Ahead in the World of Professional Services

Continuous development is essential in the finance and accounting world to stay credible and excel in the profession. At Moore Markhams, we prioritise ongoing learning to navigate regulatory changes, enhance technical competence, nurture industry expertise, foster innovation, boost credibility and trust, and attract top talent. By investing in our staff's growth and staying ahead of the curve, we solidify our position as a trusted partner in our clients' financial journey.