June 2023 - Inside this issue
- Brightline - Main Home Exemption
- Proposed Increase in Trust Tax Rate
- Kidney Kids morning tea
- BNZ Bankfeeds in Xero
- Expenses and Record Keeping Training
Brightline - Main Home Exemption
If you sell a residential property you have owned for less than 10 years you may have to pay income tax on any gain on the sale, unless an exclusion or rollover relief applies. This is the bright-line property rule, and it also applies to New Zealand tax residents who buy overseas residential properties.
A property will not be taxed under the bright-line property rule if the main home exclusion applies. The rules about how the exclusion applies vary depending on when you acquired the property and any changes in the ownership structure. If your main home is owned by a Trust, you also need to consider who the principal settlor is and if this has changed over the life of the Trust.
We recommend you get in touch with us if you plan on selling any properties, ideally before entering into any agreements. There are a number of factors to take into consideration when understanding if the property is captured under Brightline, and we would need to complete the Brightline review in order to better understand your position.
Please get in touch with us if you are selling your residential property.
Proposed Increase in Trust Tax Rate
The Government is proposing to align the trustee tax rate with the top personal tax rate of 39% for the 2024–25 and later income years (beginning 1 April 2024 for most trusts).
Aligning the trustee and top personal tax rates at 39% would help ensure that trusts cannot be used to pay less than the top tax rate of 39%. According to the government this would improve the fairness and progressivity of the tax system, protect the revenue base from erosion, and improve the Government’s ability to raise revenue.
To prepare for this change we need to ensure that a number of factors are considered for your companies and trusts prior to 31 March 2024. This change will impact many of our clients especially those whose Trust’s own shares in their companies. As such we will be recommending that these companies declare dividends in March 2024 which will be taxed at 33% rather than the new 39% if declared after 1 April 2024.
Please keep an eye out for information from us in this regard, and if you are unsure of what action to take, please contact us to ensure that your decision is the right one for you.
Kidney Kids Fundraiser Morning Tea
We are hosting a morning tea June 30th at 10am to raise funds for a deserving charity Kidney Kids.
Kidney Kids NZ is in much need of all our support to raise more funds to support kids growing up with kidney disease. We want to raise their profile and awareness amongst the community and hopefully collect a donation or two for them.
So please, come along to the morning tea and show your support we would love to catch up with you too. Please register to attend by clicking the link below.
BNZ Bankfeeds in Xero
As a result of changes to the BNZ bank systems any existing BNZ bank feeds in Xero will be disconnected on 15 August 2023. New banks feeds will need to activated in Xero and switched over 14 August 2023.
If we own your Xero software, we will be in contact via email with instructions on how to complete the integration to the new bank feeds to organise the switch and get your bank feeds switched over and reactivated.
If you own your own Xero software, you will be able to do the migration yourself and will be contacted directly by Xero on instruction on how to complete the switch. If you have not been contacted by Xero please get in contact with us and we will be able to provide instructions on how to complete this migration.
Expenses and Record Keeping Training
This month's client training will focus on what expenses you can claim in your business and how to keep records of these expenses.
The training is scheduled for 20th June at 10am and will be hosted at our office.
Please register your interest to attend below.
If you have any questions or concerns for us, please don’t hesitate to get in touch with us.
From
THE TAEL SOLUTIONS TEAM
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