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Articles by Matthew Gilligan

Breaking News - Tax Rate Change

AUTHOR: Matthew Gilligan

POSTED: 10 September 2020

Yesterday (9 September 2020) Labour announced a new tax rate of 39% on personal income exceeding $180,000 per annum. Key points that we know so far:

• Applies to individuals only, i.e. an individual on a salary of, say, $200,000 will pay an additional $1,200 per annum

• It does not apply to combined household income, i.e. a couple each earning $100,000 for a total of $200,000 per annum will not pay any more tax

• All other rates and brackets remain the same

• Any new taxes or further income tax increases ruled out for their next term (if elected).

• Applicable from next year

• No changes proposed to trust (33%) or company (28%) tax rates

The last point is significant, emphasising the importance of getting the right business / investment structure in place. There will be tax planning opportunities arising out of the differential between the trust and company rates and the new highest rate. It would not surprise me if Labour revisits their position on the trust tax rate at least, but that is how things stand at present.

If you would like a review of your tax position and structure, please phone us on +64 9 522 7955.

Request a Meeting

Matthew Gilligan
Director

09 522-7955

mg@gra.co.nz

© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

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This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request

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