Latest proposed Tax changes announced 1st December 2020

On 1 December 2020, the government introduced the Taxation (Income Tax Rate and Other Amendments) Bill (2-1) into Parliament.

 

This bill is primarily to introduce the new top personal tax rate of 39% on annual income that exceeds $180,000.

The rate will apply from the 2021-22 tax year.

 

The bill also introduces extensive information gathering powers in relation to trusts.

 

From the 2021-22 tax year it is proposed that trusts include additional information  in their annual tax return such as:

 

  • The amount and nature of any new settlement on the trust

  • The name, date of birth, tax residence and tax number of any person making a settlement

  • The amount of any distribution made by the trust during the year (capital as well as income distributions)

  • The name, date of birth, tax residence and tax number of any person receiving a distribution

  • The name, date of birth, tax residence and tax number of any person with the power to appoint or dismiss a trustee, add or remove a beneficiary, or to amend the trust deed

 

In addition it is proposed that the IRD will have the power to request the information for the previous 7 years.

 

The bill can be read here:

http://legislation.govt.nz/bill/government/2020/0002/latest/LMS430743.html#LMS430795

For any further information please contact us on 06 757 5477 or info@velocite.co.nz

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