- Research to be undertaken on distribution of wealth in NZ
- While a step in the right direction, taxpayers are still seeking clarity on recent significant tax announcements
The days of tax heavy budget announcements are a thing of the past, with this year's budget including only one core tax initiative – 'Ensuring the Tax System is Operating Fairly'.
Just $5 million has been allocated for this year and next, aimed at collecting information on the level of tax paid by high-wealth individuals and their related entities. This will influence research to understand the overall distribution of income and wealth in New Zealand.
Many taxpayers will be grateful that today's budget contained no tax surprises. The past six months have brought several significant changes including; the new top personal tax rate and its related implications (such as for FBT rates), purchase price allocation rules, changes to the bright-line rules for residential property investors and the proposed denial of interest deductions, as well as increased trust disclosure requirements.
So, while the budget was notably quiet on any further tax changes, taxpayers and businesses are looking for clarity and certainty.
"Taxpayers and tax agents would benefit from practical guidance around purchase price allocation changes to apply from 1 July and, the increased trust disclosure requirements which apply from the 2021/22 and later income years. Now is the time to ensure taxpayers are aware of and understand recent developments"
"Chartered Accountants ANZ would have liked confirmation that unintended consequences of recent changes would be remedied, such as the increase in the default FBT rate where most employers have no or few employees subject to the 39% top personal tax rate. This would promote fairness and integrity within our tax system whilst reducing compliance costs for taxpayers and business."
"Members are concerned that there was no opportunity for consultation on the announced phase-out of interest deductions on residential property generally, given the impact that this will have on taxpayers and investment decisions previously made," said Cuthbertson.
CA ANZ is already seeking views from members on the limited areas of these changes that will be open to public consultation. We are concerned about the limited window to consult, and the expectation that the proposed changes will not be enacted till after the signalled application date of 1 October 2021.
NZ Budget 2021
Read more of what the CA ANZ advocacy experts say about the NZ Budget.Read more