Before you sell your rental property contact us first

The Accident Compensation Corporation (ACC) is responsible for insuring and collecting ACC premiums for employers, self-employed and private domestic workers. Premiums are based upon the risk of accident for an industry category.

Depreciation rate for buildings

From 2011-2012 year the depreciation rate for buildings with an estimated useful life of 50 years or more - such as rental housing and office buildings - will reduce to zero. Buildings that were previously considered to be structures, and were purchased on or before 30 July 2009 will continue to be treated as structures for tax depreciation purposes. Any improvements to these buildings made after 30 July 2009 will not receive the grand-parented (?) treatment.

Depreciation loading for assets

20% depreciation loading (a tax concession in the form of accelerated depreciation) was removed for assets purchased after 20 May 2010. The economic rate of depreciation applies.

Individuals can claim a tax credit (formerly rebate) of one-third of qualifying cash donations up to the level of their taxable income. Companies can claim a deduction for cash donations up to the level of their net income (before deducting the donation amount). Please ensure that you supply the original donation receipts with your tax papers to enable us to claim this for you.

Entertainment expenditure is limited to a 50% deduction if it falls within the following:

Corporate Boxes

• Holiday Accommodation
• Pleasure Craft
• Food & Beverages consumed at any of the above or in other specific circumstances e.g. business Lunches.

Talk with us about exemptions from these rules.

Fringe Benefit Tax (FBT) taxes benefits that employees receive as a result of their employment, including those benefits provided through someone other than an employer.  These include:

• Motor vehicles
• Low-interest loans 
• Free, subsidised or discounted
• Employer contributions to sick, accident or death benefit funds, superannuation schemes and specified insurance policies Gifts, prizes and other goods are fringe benefits. 
• If you pay for your employees' entertainment or private telecommunications, these benefits may be liable for fringe benefit tax. 
• Low-interest loans

Talk with us about FBT on subsidised/discounted goods & services, and employer contributions.

The government will abolish Gift duty from October 1, 2011. The removal of gift duty and its associated compliance costs will lead to more trusts being established in New Zealand. 

Potentially there will be new powers for IRD to claw back gifts or to register a charge over gifted assets in tax debt situations.

This would give IRD a superior ability to recover debt over other creditors and of course must be a very attractive option for IRD. 

If you already have a Trust, ask us for more information about what you should do.

GST is a 15% tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. Goods for export may be zero rated for GST. Other goods and services are also 'exempt supplies'. These include:

Certain financial services

• Sale or lease of residential properties
• Wages/Salaries and most Directors' Fees

GST registration is required if the annual turnover of the business for a 12-month period exceeds or is expected to exceed ,000.

Ask us for more information.

Pay as You Earn (PAYE) is the basic tax taken out of your employees' salary or wages. The amount of PAYE you deduct depends on each employee's tax code. 

PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate. Employers must also file an employer monthly schedule with IRD detailing each worker's gross earnings and deductions.

Employers with gross annual PAYE of 0,000 or more must file this schedule electronically with IRD using IRD’s IR File system. If you are a ‘small employer’ with gross annual PAYE deductions of up to 0,000, payments are made to IRD on the 20th of the month following the deductions.

The employer monthly schedule must also be filed by the 20th of that month. For more information or to register as an Employer either call us or visit the IRD website

Provisional Tax is a convenient way to pay your income tax as the income is received through the year. You pay by instalments based on what you expect your tax bill to be.

The provisional tax you pay is then deducted from your tax bill at the end of the year. If your residual income tax is 82,500 or more you will have to pay provisional tax for the following year. 

Residual income tax is basically the tax to pay after subtracting any rebates for which you are eligible and any tax credits (excluding provisional tax).

Residual income tax is clearly labelled in the tax calculation in your tax return.

In some circumstances you may be charged interest if the provisional tax you paid is less than your residual income tax. If the provisional tax you pay is more than your residual income tax, the IRD may pay you interest on the difference.

If you are also registered for GST you can pay your provisional tax at the same time as your GST payments. You will be able to use the ratio option if:

You’ve been in business and GST-registered for the previous two tax years.

• Your residual income tax for the previous year is greater than [82],500 and up to 0,000
• You file your GST returns every month or every two months
• The business you’re operating is not a partnership
• Your ratio percentage that IRD calculates for you is between 0% and 100%

This method of paying provisional tax may not suit everyone and we suggest that you discuss this with us before deciding on any option.