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Items of Interest

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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