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We believe in passing on knowledge.

Around one in five Kiwis is either invested in cryptocurrency or plans to invest, according to a survey by the Financial Services Council. With so many of us jumping into cryptoassets, it's helpful to understand what our tax obligations are.


Last year Inland Revenue updated its guidance on how these assets are taxed; the IR treats cryptos as a kind of digital property, rather than like it would a traditional currency. You can read more about it here, and some of the basic information is summarised below:

When do you need to pay tax on cryptocurrencies?

When you buy or mine cryptocurrencies, there is no tax to pay. And while you hold cryptocurrencies, there is no tax to pay.

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Most residential rental property owners should be well aware of the Healthy Homes Standards which became law on 1 July 2019.

The healthy homes standards introduce specific and minimum standards for heating, insulation, ventilation, moisture and drainage, and draught stopping in rental properties. 

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When you own a residential rental property, the tax you pay depends on whether you are an investor or dealer in residential rental property as dealers are taxed more heavily.

Rental property investors generate ongoing rental income, without any firm intent of resale, while property dealers/speculators buy property intending to sell it and have established a regular pattern of buying and selling property.

In this article we focus on the first category – rental property investors.

Rental income and paying tax

If you're charging rent, you may need to pay tax on the rental income you earn in the same year you receive it. Your rental income could be from a house, land, caravan, sleep-out, building, holiday home or room in your own home.

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Tucked away toward the back of your annual financial statements you will find details of your shareholder current account. It might be in credit or it might be overdrawn, and you might ask does it really matter?

The answer to this question is yes – it does!

We find current accounts is an area that is not well understood, and therefore the consequences of overdrawn balances can come as a shock to clients. Below we have outlined what a current account is and key things you need to know.

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Fringe benefit tax (FBT) is a topic that often isn't well understood. What might seem like a generous gesture to an employee may actually see you digging into your pockets to pay extra to the tax man!

To help you better understand this area, below is an overview of the types of activities subject to FBT, with a particular discussion on use of motor vehicles which is the most common scenario our clients face.

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End of year tax tips

Are you concerned about paying your terminal tax bill on 7 April?

We understand how terminal tax can sometimes put pressure on your cash flow. And, if you add into the mix that looming provisional tax payment due on 7 May (the final installment for the 2019 year), it can add up to a few sleepless nights, right?

If this describes your situation, stop losing sleep and pick up the phone to us. Let's look at the issue squarely, run the numbers on your options and take prompt action before your tax bill escalates.

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Like most property owners you have probably heard about the bright-line test but not necessarily understood how and when it could apply. We have been noticing an increase in queries from clients about how this property rule applies to their own situation.

Put simply, bright-line says people who sell a house in New Zealand within a specified number of years of buying it, must pay income tax on any gains, unless it's their main home or another exception applies. Originally this period was two years and since 29 March 2018 this has increased to five years. 

The bright-line rule is a clearly defined rule that leaves no room for interpretation. You can think of it as someone drawing a line in the sand. It's clear when you cross that line.

To help you understand and navigate this relatively new area of property tax rules, below are a range of questions and answers as provided by the IRD.

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“The IRD has a way of finding out….”

Jo was having a good giggle watching Shortland Street last week. She called me to come and watch the 'tax man' making his debut on our nations' longest running soap, chasing down beloved Dr Drew McCaskill for probable (intentional) tax evasion. 

While the one liners such as Drew referring to his tax audit as "….. jumping through pedantic Government hoops so drones like Gerry can justify their jobs" will never be as famous as Dr Ropata's "We're not in Guantemala now", as Chartered Accountants we have found the tax man episodes highly entertaining. 

Drama aside though, there are some very useful lessons highlighted by the scriptwriters' take on tax matters, including the importance of record keeping and taking proper professional advice from a qualified Chartered Accountant.

Here is Jo's commentary on Dr Drew McCaskill's IRD audit woes:

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New Zealanders are jumping onboard the Airbnb craze, turning their spare space and holiday homes into income generating assets. Particularly this year, we have noticed an increase in clients utilising this latest example of the sharing economy in action. While the benefits sell themselves, you may develop a tax headache if you haven't considered your overall tax position and approach. A little extra income on the side can turn into an unexpected tax bill.

What is Airbnb?
Put simply, Airbnb connects people online wanting to rent their property (entire property or a set space within a property), with people who are looking for accommodation. Hosts and travellers from over 190 countries worldwide participate in this online global marketplace.

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Source: Ministry of Business, Innovation and Employment (NZ) www.business.govt.nz

Do you have overseas accounts and investments?

If you have an account with an offshore financial institution, including banks and accounts maintained with certain offshore trusts, upcoming changes will see information about your overseas investments being shared with the IRD.

What you need to know

New Zealand is one of 105 countries and territories that has committed to sharing financial account information to combat global tax evasion. These laws have been in place since 1 July 2017.

From August 2018, the government will receive information about New Zealand tax residents with offshore financial accounts from other countries' financial institutions.

If you have an account with an overseas financial institution (including certain offshore trusts) you'll be required to confirm and disclose your tax residence status and tax identification number (TIN) with the overseas financial institution. This financial account information will be exchanged and will help the IRD verify that everyone is paying the correct tax on these overseas investments.

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