Tax Tips: August 2019

In this issue:

The Government's tax policy work programme

The Government has recently announced its new Tax Policy Work Programme (TPWP). The TPWP outlines the Government’s priorities for tax reform. It is generally updated every 18 months. Unsurprisingly, a number of the items in this latest edition of the TPWP stem from the recommendations contained in the Tax Working Group’s (TWG) final report to the Government. The main focus areas include reducing compliance costs for small and medium enterprises, infrastructure, and the environment – all of which are consistent with the TWG’s final report. It is also great to see a specific reference to remedial amendments as we agree it is important that tax legislation is regularly maintained or updated to ensure it operates as intended. In this article, we discuss some of the key items on the programme.

New tax and social policy engagement framework

Inland Revenue has published its new tax and social policy engagement framework (the framework), following feedback from stakeholders. The framework is intended to build on the Generic Tax Policy Process (GTPP), which has been in place since 1994, in guiding tax policy development in New Zealand. In this article, we outline the key principles to which Inland Revenue has committed under the new public consultation framework.

Tax bills update

In this article, we provide an update on the progress of recent tax legislation.

New legislation ring-fences residential rental property losses

The Taxation (Annual Rates for 2019-2020, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 introduces a suite of changes limiting a person’s ability to offset losses from residential property investments against a person’s other income (i.e. non-residential rental income). The rules are effective from the beginning of a person’s 2019/2020 income year.  This means these rules will apply for the current income year and may result in more taxable income for those who have previously used their residential rental property losses to offset against their other income (e.g. employment income).  Instead, residential rental property losses can only be used to offset against “residential income” earned in the year and any excess will be carried forward to the next income year. In this article, we outline the key features of the new rules in more detail.

Download our August Tax Tips below to read the full issue.

Please get in touch with your usual adviser if you would like to discuss any of these developments in more detail.


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