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Items of Interest

In Brief - Tax Changes April 2019

Recent Changes Include:

  • Capital Gains Tax Proposal
  • Automatic Assessments for Individuals
  • Donation Tax Credits made Easier
  • IRD Receiving Payments – When Received in Time

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Air BnB and GST - What's the Catch?

Renting property on Air BnB or other sites such as Book-a-Bach and Bookings.com can have some significant unintended GST consequences and we encourage all clients to contact us prior to listing. The particular risk areas are:

  • Generating Air BnB rental income of more than $60,000
  • Listing property on Air BnB which is owned by a GST registered entity

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Payroll - Payday Filing

IRD has provided extensive communication on payday filing which is effective from 1 April 2019.

With payday filing, you'll:

  • Send IRD your payroll information with your normal pay cycle (rather than monthly)
  • Provide employee details for new and departing employees to the IRD
  • File electronically within two working days of the payday, or
  • File by paper within 10 working days of the:
    • Payday, or
    • 15th and end of month if you choose to send us information twice a month.
  • If your annual PAYE and ESCT deductions are $50,000 or more, you must file electronically. If less than $50,000, you can file electronically or by paper.
  • There are no changes to current payment due dates or the way you pay (monthly or twice-monthly like you do now).

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This Bill is expected to be approved by Parliament in mid-late 2019, but the effective date of the ring-fencing rules would be 1 April 2019.  Potential road blocks to the ring-fencing law are inconsistency with potential capital gains tax policy.

The 2019/20 Taxation Bill proposes that residential property investors will no longer be able to offset losses from rental properties against their other income (e.g. salary and wages, business income) to reduce their overall tax liability. Rather, any excess expenditure will be carried forward as property losses until there is enough income from property to utilise those losses. In other words, the losses are "ring-fenced" and can only be accessed by earning property-related income.

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