Government Further Extends Support for Businesses – Changes to the extended wage subsidy scheme and the Small Business Cashflow Loan Scheme. See details…
Reopening Your Business After Covid 19 – Where to from here? If you want to find out more about Business Recovery Planning, contact us or watch our webinar .
Covid-19 Small Business Cash Flow Loan – What does it offer and what are the terms? Contact us for advice or download the Application Guide
Government announces interest free loan scheme for small and medium enterprises – What’s involved and am I eligible?
Wage Subsidy Scheme – Be Prepared for an Audit! Information on the criteria for applying, basis of the wage subsidy and how to prepare for an audit.
Covid-19 Business Support Fact Sheet. Information on the tax loss carry back scheme, changes to the tax loss continuity rules, flexibility in respect of statutory tax deadlines, measures to support tenants and landlords, and further business consultancy support
COVID-19 Government Support Package – What it means for you. Information on wage subsidies, leave & self isolation support, tax changes, individual support
Join us for our seminar on March 19th to learn strategies you can implement in your business to reach its true potential.
Are you a trustee of a Trust?
The Trusts Act 2019 (Act) received Royal Assent on 30 July 2019 and will replace the Trustee Act 1956 and the Perpetuities Act 1964 effective from 30 January 2021. The changes are significant and if you have a family trust or are a trustee of a family trust, you should be aware of the changes and seek advice where appropriate. We set out some key changes below:
Disclosure of information to beneficiaries
Trustees will have a duty to write to beneficiaries advising them they are beneficiaries of the trust and that they are entitled to request further trust information and documents. This will increase the likelihood that beneficiaries will seek detailed information from trustees. Considering this disclosure requirement settlors may wish to review the list of persons who are discretionary beneficiaries of a trust and remove any discretionary beneficiaries who are unlikely receive distributions from the trust.
New record keeping requirements
Trustees will be required to keep core trust documents for the duration of the trustee’s trusteeship and must pass on the documents to replacement trustees to ensure trust records are retained for the lifetime of the trust. Trustees should review their trust records to ensure they will be compliant with the Act.
Trustees will be prevented from claiming indemnity under the trust deed should they operate the trust in a manner that is grossly negligent. Accordingly, trustees will need to take more care when administering trusts, including spending more time and effort to accurately document trust transactions.
The life of a trust is currently limited by the common law rule known as the rule against perpetuities to 80 years. The Act abolishes this rule and extends the maximum duration of a trust to 125 years. The effect of this change is that family trusts will be able to continue for longer and used as a succession planning vehicle for more generations. Trust deeds will need to be amended to extend their duration if this change is to be taken advantage of.
Please get in touch with DNA or your solicitor if you wish to discuss what effects these changes will have on your trust.
The Labour Government appointed Tax Working Group (“TWG”), headed up by former Labour Minister of Finance, Hon Sir Michael Cullen, is currently undertaking the fifth major review of the New Zealand tax system in the last 50 years.
The TWG has a wide brief, but its key purpose is to provide recommendations to the Government that will improve the fairness, balance and structure of the tax system over the next 10 years. The TWG released its interim report inviting further commentary on 20 September.
The hot topic of the review has been the consideration of Capital Gains Tax (“CGT”). The main driver behind the implementation of a CGT had been the perception that the tax benefits swaying investment towards the Residential Investment Property sector need to be balanced out. The interim report goes into some detail discussing the taxation of capital and wealth, firmly ruling out an implementation of wealth taxes, but leaving CGT on the table on the basis of fairness.
The report goes as far as discussing specific design features and identifying two main options, either taxing realised gains that are not already taxed, or taxing certain assets on a deemed basis (akin to a risk-free rate of return method). The family home, and the land under it would be exempt under either method.
The proposed risk-free rate method smells a lot like a wealth tax which would be payable annually on a base asset value. The risk-free rate would be set at a level to reflect perceived average annual increase in asset values. The need to fund the cash tax payments arising from a CGT applied on this basis should be particularly concerning for anyone holding investments in property or business!
Another concern is the proposal that should a CGT be implemented then capital gains from assets which the CGT applies would be caught from the implementation date, and valuations of all assets would be required on that date to assess the base price that capital gains would be calculated on.
The TWG is still forming its views on the implementation of a CGT and will complete a comparison between the best proposed methodology and the status quo to determine its ultimate recommendation. Whilst no conclusive recommendation has been made, it appears that today New Zealand is one step closer to a broad- based CGT.
To make sure you are ready when the Eagle does land, contact the team at Drumm Nevatt & Associates Limited to discuss.