Welcome to the Vision Accounting e-newsletter for June 2015. This is a great way for us to share important information you need to know, helpful tips and hints and practical resources to help you in business for 2015.
What's very exciting?
I am very excited to be included in the articles alongside the cover story in the June edition of NZBusiness Magazine
. This features Fiona Clark, of Breakthrough Business Solutions, who has launched a programme for Women in Business which I have been attending. I am so honoured by her for including me in her feature article, alongside Jo Kitchen of Northcross Physio and Rehab. NZBusiness Magazine is a wonderful magazine, which is always worth a read, as the stories are relevant to New Zealand Businesses, and this particular issue is of-course extra special as your own Chartered Accountant is featured in it. I found it a humbling experience to have been selected for this interview. Click here to read an image of the article
What You Need to Know
The Budget 2015 - Safe as houses
The suspense about whether and when a capital gains tax would be introduced to New Zealand seems to have been drawn out for well over a decade. OK, the suspense is over now. Are you relieved?
The focus in this budget is on damping down property speculation rather than taking a slice off the family home.
There will be a two-year window for sales of residential property. If residential property is bought and sold within two years, it will be subject to tax. This does not apply for:
- taxpayers selling their family home
- inherited property, and
- property that is being transferred as part of a relationship property settlement
The new rules will apply to properties bought on or after 1 October 2015. More detail is expected to come out in July.
It’s important to note that if you intend to sell a property outside of the 2 year timeframe, the sale may still be subject to tax, as it may still fall within other rules relating to the taxation of property. Please contact us if you are selling a property to see what rules apply.
In addition, anyone buying or selling land - both New Zealand residents and non-residents - will have to provide an IRD number as part of the land registration process. All sales of land - other than sales of the main family home - will be subject to this requirement.
In addition to providing a New Zealand IRD number, non-residents will also have to:
- provide their country's equivalent of an IRD number, and
- open a New Zealand bank account
Other Budget matters
(A)mending the safety net
The government is giving explicit support for children in hardship. They’ve tried hard to balance this so as not to undermine incentives to work.
Benefit rates will increase for families with children by $25 per week after tax. Beneficiaries who work part-time will be expected to find 20 hours’ work each week rather than the 15 hours currently required. And while most sole parents and partners of beneficiaries were expected to be available for part-time work after their youngest child turns five years old, they will now be expected to make themselves available after their youngest turns three.
Childcare assistance for low-income families will increase from $4 an hour to $5 an hour for up to a maximum of 50 hours of childcare a week for each child.
Working and studying for families
Student Allowances for families with children will increase by $25 a week.
Both the Working for Families (WFF) in-work tax credit and the WFF tax credit abatement rate will increase from 1 April 2016:
- Low-income working families earning $36,350 or less a year, before tax, will see an extra $12.50 per week and some very low-income families will receive $24.50 extra
- Working families earning more than $36,350 will receive more from WFF, but the amount is dependent on each family’s income and it won’t be more than $12.50 a week
- Families earning more than $88,000 a year will see slightly lower WFF payments, with the average reduction being around $3 a week
ACC levies will continue to fall, with cuts of $375m forecast for 2016 and a further $120m in 2017. If cut as forecast the average motor vehicle levy, including the annual licence fee and petrol levy, could fall to around $120 in 2016.
The $1,000 kick-start incentive payment is no longer available to people enrolling in KiwiSaver. However, this does not affect existing KiwiSaver members in any way.