End of Financial Tax Year
05 Mar 2023
As the end of the tax year approaches, it's essential to prepare your income tax return promptly to avoid late filing penalties. While the process may seem overwhelming, proper planning and information can streamline it significantly. This article outlines key recent tax changes that may impact your filing, helping you navigate your obligations efficiently and effectively.
Trust Reporting Requirements
In order to increase transparency, the New Zealand government has implemented new disclosure requirements for trusts that generate assessable income, effective from the 2022 income tax year. Trusts that fall outside of the excluded trusts category will be required to furnish additional information in their annual income tax return (IR6). This includes financial statements, settlement details, beneficiary details, distribution details, and details of persons who hold the power of appointment to add or remove trustees and beneficiaries. The Inland Revenue has also issued various consultation documents regarding the new disclosure rules for trusts. The new disclosure rules are expected to impact up to 180,000 domestic trusts.
Interest deductibility limitation
Another change to keep in mind is the interest limitation rules. These rules will phase out the deductibility of interest expense against income from residential rental properties purchased prior to the<
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