CA ANZ recently provided feedback on draft interpretation statement PUB00310. The interpretation statement provides detailed guidance on when and how the financial arrangement rules apply to foreign currency loans that New Zealand resident individuals use to finance an overseas rental property.
The financial arrangement rules are very complex, and many taxpayers and tax agents have difficulty understanding and applying the rules. While we appreciate the role of an interpretation statement is to provide a legal analysis of the law and set out the Commissioner’s view of the taxation law, we are concerned that even with the benefit of the statement, many will still struggle with understanding and applying the rules. A lack of understanding resulting in non-compliance. It would be helpful if this statement could be accompanied by simplified and plain English fact sheets or QWBAs that incorporate examples and flow charts.