Owens Tax Advisors regularly present and provide public comment on topical tax matters.

Our principal, Jeff Owens is also an accomplished and popular public speaker on tax matters. If you would like to arrange for Jeff to comment on or prepare and present a lively discussion on topical tax matters, please contact us.

Ceasing NZ residence for tax purposes

If a NZ tax resident wants to cease NZ tax residence, they must satisfy two tests:

  • They must be physically outside of NZ for more than 325 days in a 12-month period, whereupon they may cease NZ tax residence from the first of those days. Note that the days of absence do not need to be consecutive, but even an hour in NZ on any day is counted as a day in NZ
  • They must cease to have a ‘permanent place of abode’ in NZ. This does not mean bricks and mortar as such although availability of residential property (whether or not owned) is an important factor.

People who should know better sometimes try to distill these down to simple concepts but there can be subtle issues in interpretation.

Read on “Ceasing NZ residence for tax purposes”

Risk reviews, penalties and prosecutions

Owens Tax Advisors Limited has been in practice since late 2002. Since then we have been referred and assisted dozens of clients facing IRD risk reviews and audits, often involving significant amounts of GST, income and other taxes. For the vast majority we have been able to negotiate significant reductions in core tax, penalties and interest and avoided court, prosecution and expensive legal fees.  The few exceptions were all people who came to us far too late.

IRD maintains a database of high profile cases that do result in prosecution. 

https://media.ird.govt.nz/articles/?tags=Court%20cases

Dont be one of them….

Residential Property Brightline Test

An interesting article was published in Stuff on 23 January 2020:

www.stuff.co.nz/business/118961210/inland-revenue-slaps-property-traders-with-125m-tax-bill

The article is broadly about the tax Brightline Test which taxes capital gains on real property bought and sold within a specified period.

The Stuff article includes some misleading comments and also highlights a critical error (albeit by omission) in the way IRD tells taxpayers how the Brightline period is calculated.

Read on “Residential Property Brightline Test”

IRD chasing fictitious debt

We have lodged a complaint with the Commissioners office that IRD claims that tax may be overdue when it isnt, while simultaneously failing to record tax that is actually due.

In the meantime if a taxpayer underpays tax, whether deliberately, or in error, or even if they are tricked by IRD as above , IRD charges 8.35% and often late payment penalties on top.

Whereas if a taxpayer overpays their tax, IRD pays at best 0.81% per annum.

See: www.ird.govt.nz/topics/income-tax/interest-on-overpaid-and-underpaid-duties-and-tax

Read on “IRD chasing fictitious debt”

IRD chasing foreign sourced income

Inland Revenue has recently confirmed that it has been exchanging financial information with overseas financial institutions and revenue authorities

See for example two IRD media articles in November 2019:

https://media.ird.govt.nz/articles/ir-updates-its-compliance-focus-on-multinationals/

https://media.ird.govt.nz/articles/no-place-to-hide-overseas-income/

IRD has also begun a letter writing campaign:

  • referring to the above strategy,
  • IRD has received financial account information concerning foreign accounts from one or more jurisdictions in the 2018 and/or 2019 year
  • Inviting a voluntary disclosure

We thoroughly agree with IRD’s approach to this apart from neglecting to recommend they get expert advice, instead recommending taxpayers contact IRD directly (like inviting you to watch a YouTube video to find out how to remove your own appendix).

We have published articles on these matters previously

If you do get one of these letters we invite to you contact us immediately at info@owenstax.com

Under the link below we have reproduced the text of a typical letter from IRD

Read on “IRD chasing foreign sourced income”

Inland Revenue bypassing tax agents – again and again and again

Inland Revenue continues to bombard taxpayers with correspondence that is duplicated, redundant, and in some cases, just plain wrong.

Worse, Inland Revenue seems to make very few distinctions between taxpayers who file their own returns and those who have engaged a tax agent to communicate with Inland Revenue on their behalf.

This severely undermines relationships between IRD and agents, IRD and taxpayers, and worst of all, between agents and their clients.

Postscript – In late November IRD advised as follows:

Tax agent redirect

We’ve received feedback that some of our letters are being issued directly to clients, rather than redirecting to tax agents. Over the past few weeks, we’ve undertaken a systematic review of all the letter currently set to not follow the tax agent redirect.

While some of these letters are correctly designed to go directly to clients, some have been programmed incorrectly, and we’re working on each letter individually to fix this. We’ll provide an update here once we have more information. You can find more information on the letters which we’ve already fixed in our archive.

We’re also working to update our system so that all new letters after April 2020 will be set to follow the tax agent redirect by default.

This is a positive development although:

  • For ‘some’ letters – read hundreds of thousands of letters
  • We’ve received feedback – read hundreds of agents complaining about this for the last two years or more
  • Good to see it being resolved from April 2020 – of course IRD has made similar promises including to fix by April 2019

Imagine how much quicker this could have been resolved if IRD had not put so much effort into denying the problems existed

Read on “Inland Revenue bypassing tax agents – again and again and again”

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