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Tax on your overseas share investments

If you own overseas shares (excluding Australian-listed companies) that cost more than NZ$50,000 in total, then you may need to follow the FIF (foreign investment fund) taxation rules, which differ from simply including dividends received in your income tax return. If this is your situation, don’t hesitate to get in touch.

Ring fencing property losses

Losses from residential property rentals can no longer be offset against other income, but instead must be ring-fenced and carried forward to apply to residential rental income in future income tax years. Depending upon the number of properties you own, you can choose to apply the ring-fencing on an individual or portfolio basis.

Property ‘change of use’ rule

If the sale of your property is subject to the bright-line test, and you don’t use a property as your main home for 12 months or more, you will be required to pay income tax on a proportion of the profit made through the property increasing in value.

Working from home credits

As the incidence of working from home has continued, the IRD has extended the tax exemption on the work from home allowance of up to $20 per week until March 2023. Employees can receive up to $20 per week, tax-free, to cover the additional costs of working from home such as printing, internet usage and power. Any payments above this, require evidence of expenses.

Calculating fringe benefit tax

To calculate the fringe benefit tax payable on a motor vehicle you will need the vehicle’s cost or book value, the number of private use days in the quarter and any employee contributions towards the vehicle’s use. The detailed rules can be complex, so for specific advice relating to your circumstances, please do not hesitate to get in touch.

What you will pay fringe benefit tax on

Fringe Benefit tax (FBT) is payable when the following benefits are supplied to employees: Private use of a motor vehicle, Low or interest-free loans, Free, subsidised or discounted goods or services, Employer contributions to sick, accident, insurance schemes. Once you start providing fringe benefits to your employees, you will need to register for FBT via My IR and file quarterly returns.

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