Comparing New Zealand’s taxation of property with other countries

Comparing New Zealand’s taxation of property with other countries

  • Comparing New Zealand’s taxation of property with other countries
  • OECD heralds a clampdown on crypto assets
  • Another warning from Inland Revenue about attempts to manipulate income to avoid the 39% tax rate

Transcript

In last week’s Sunday Star Times, Miriam Bell looked at the question of how New Zealand’s taxation of property compares with other jurisdictions.

In doing so, she spoke to myself, Robyn Walker of Deloitte, and John Cuthbertson, the tax director for Chartered Accountants Australia and New Zealand. We all gave differing takes on the position.

According to the OECD statistics, we are near the bottom end of the range as a percentage of GDP. Including local government rates, New Zealand’s taxes on property for 2020 was approximately 1.9% of GDP and the total tax take for the year of 32.18% of GDP. By comparison, Australia’s taxes on property was 2.718% of GDP (2019 numbers), the UK was 3.855% and Canada 4.15% of GDP (both 2020 numbers).

As you can see, Canada and the UK are significantly above New Zealand. One of the reasons for this, as Robyn and John pointed out, is that they have a range of stamp duties that may apply. But also, as we all pointed out, all three jurisdictions, Australia, Canada and the UK, also have capital gains tax and in the case of the UK, inheritance tax may also apply on some properties on transfer.

The article provoked a fairly lively debate, as you would expect. The range of views across the board is that, yes, it looks like we’re under taxed. But the bright-line test is in place which is problematic in that although it looks like a capital gains tax, it doesn’t apply comprehensively, unlike in the other three jurisdictions.

Robyn Walker then made a very good point following through that the design of the bright-line test is basically all or nothing. If you hold property for more than 10 years, you’re outside the test, which means that you’re likely not to be taxed on it. So you get this wide variance in the tax effect of sales or property, which you don’t see to the same extent in other jurisdictions.

Robyn subsequently did a nice little post on LinkedIn, in which she looked at what would be the tax consequences in Australia, Canada, the UK, and New Zealand for the sale of a property which realised a $100,000 gain. Because we treat it as income, we’ll tax the full gain at the relevant marginal rate and for the purpose of the example that was 33%. Canada and Australia will tax only half the gain at the relevant marginal rate, although non-residents in Australia will be taxed on the full gain. And although the UK will tax the full gain the top rate applicable is 28%.

The end result was that if the bright-line test applied, then the tax payable in New Zealand would be highest relative to the other three jurisdictions. But if the bright-line test didn’t apply, then it was the lowest. In fact, it would be nil. And this reinforces Robyn’s point that it is a poorly designed test which can be very unfair in its application. You hold a property for nine years and 363 days, you’re taxed. Hold it for 10 years and one day you’re probably not.

The point I stressed in the article is that we want to look at broadening the range of taxation, and it’s fair if we do so because we start to get round these arbitrary distinctions. As I’ve previously said, my preferred methodology for expanding the taxation of capital is that promoted by Associate Professor Susan St John and myself the fair economic return, not a transactional based capital gains tax.

Anyway, this debate will continue to run and run. Miriam Bell’s article provoked a fierce reaction on Stuff, unsurprisingly, and there’s been an interesting debate around Robyn’s LinkedIn article. I urge you to take a look at that.

I think we really do need to address the issue of taxing property particularly when you consider what the Infrastructure Commission said earlier this week about property owners benefiting to the extent of house prices being 69% higher than they would have been without actions being taken to restrict the supply of housing.  Housing and the taxation of property is a touchpoint now and will be in next year’s election. We’re going to see plenty more of this debate

Taxes on crypto assets are coming

Moving on to another controversial asset class – crypto assets. Now the value of crypto assets has just simply exploded in the last 10 years. Because of the explosion of the value, it has forced its way onto the tax agenda and tax authorities all around the world are looking to see how this new asset class fits in with their existing rules. New Zealand is no different from other jurisdictions which are all struggling with this.  The recent tax bill that was passed last week, by the way, had provisions relating to the application of GST on crypto-assets.

A couple of weeks back, the OECD released a public consultation document proposing a new tax transparency framework for crypto assets. What it has identified is that crypto assets can be transferred and held without going through the normal financial intermediaries, such as banks, and fund managers.  And from a tax perspective, there’s no central administrator having what the OECD calls full visibility on either the transactions carried out or on the location of crypto asset holdings.

It also appears that malware attacks and ransomware attacks, payments are increasingly demanded in crypto-assets, which are largely untraceable. So that’s obviously a matter of concern to not just tax authorities.

The OECD paper also points out that some new paid payment products. Such as digital money products and central bank digital currencies, which also provide electronically storage and payment functions similar to money held in traditional bank accounts.

But at the moment, none of these are covered by the Common Reporting Standard on the Automatic Exchange of Information. A reminder the Common Reporting Standard is an agreement between almost 100 jurisdictions where they agree to swap information on financial accounts held in their country by citizens or tax residents of another jurisdiction. It’s been a huge step forward in tackling adn improving tax transparency and tackling tax evasion.

And what the OECD is proposing is, it wants to develop a new global tax transparency framework, which will involve the same reporting for transactions related to crypto assets as for financial assets covered by the Common Reporting Standard. And it’s calling this the Crypto Asset Reporting Framework, or CARF. The paper proposes that the following types of transactions involving crypto assets will be reportable under the CARF:

  • exchanges between crypto assets and fiat currencies;
  • exchanges between one or more forms of crypto assets;
  • reportable retail payment transactions; and
  • transfers of crypto assets.

This would bring about a very significant change in the crypto asset world as a result. It will basically be bringing the whole crypto asset world in line with other reportable transactions under the existing Common Reporting Standard framework. I doubt that will be very popular with investors in the crypto world, but it certainly will be for tax authorities and other authorities, such as financial regulators and police, as they deal with the implications of the arrival of this asset class. Consultation is now open on the document through until 29th April.

Same old problem returns

And finally, this week, a couple of weeks ago I discussed the new Inland Revenue consultation paper on countering attempted top tax rate avoidance. It so happens that yesterday RNZ had a story on the paper and Inland Revenue’s concerns that “structures may be being used to reduce incomes below $180,000.”

Inland Revenue has provisionally estimated that income from these high earners will be down $2.88 billion, or about 14% from the year prior.  This is on the basis that the average self-employed person – who has the most control over their income – might declare 13% less income than they did the year before, to drop from $191,000 to $166,000 (and by happy coincidence below the $180,000 threshold).  The number of PAYE earners is expected to reduce, and also declare lower incomes, from an average of $228,000 to $217,000.

If that is happening then I would expect Inland Revenue to react aggressively. On the other hand, Inland Revenue has known for some time that self-employed income spikes around the $48,000 mark (the threshold when the tax rate increases from 17.5% to 30% and $70,000 dollars when the threshold tax rate increases to 33%). I’m not yet aware of increased Inland Revenue investigation activity into such apparent income manipulation. It seems to me that although Inland Revenue has concerns about manipulation involving the new 39% tax rate, what appears to be happening around the $48,000 and $70,000 thresholds seems very blatant.

The RNZ report included a chart from Inland Revenue of the taxable income distribution for the 2018 income year which illustrated these spikes occurring at the $48,000 and $70,000 thresholds.

The graph mirrors one produced in 2008 (when the top tax rate was 39%). You can see exactly the same pattern of income spikes around $38,000, the threshold at which the tax rate increased from 19.5% to 33% and then at $60,000 when the tax rate rose from 33% to 39%.

In other words this is a very longstanding problem and the question arises why that issue has been allowed to continue? Does Inland Revenue have the resources to address it? They most certainly will say they do, and they would also probably say that they have had a lot to deal with managing the COVID-19 response over the last two together with finalising the Business Transformation project. Either way you should expect action on this from Inland Revenue.

Incidentally on the question of high tax rates, another news report covered the effect of increases for working for families tax credits. It pointed out that the effective marginal tax rate for recipients of working for families can in some cases be 57%. This is the combination of 30% tax rate on incomes over $48,000 and the 27 cents in the dollar abatement, which applies above a threshold of $42,700.

So before people start complaining about 39% being a very high tax rate, think about what’s going on with working for families, accommodation supplement and other social welfare payments. It’s quite conceivable that someone on $60,000 per annum, receiving working for families with a student loan could have a marginal tax rate on every dollar earned of 69%. This represents 30% income tax, 27 cents on the dollar abatement on their working for families and 12% student loan repayments.

By the way, the $42,700 threshold when the working for families’ abatement kicks in is now, by my calculations, less than the annual income of someone working 40 hours a week on the current minimum wage would earn. It’s another case of where governments have allowed inflation to quietly increase the tax take with worse consequences for people at the lower end of the scale. Yet another issue we’ve talked about repeatedly.

Well, that’s it for this week. I’m Terry Baucher and you can find this podcast on my website www.baucher.tax or wherever you get your podcasts.  Thank you for listening and please send me your feedback and tell your friends and clients.

Until next time, kia kaha, stay strong.

Inland Revenue wins Frucor tax avoidance case in Court of Appeal

  • Inland Revenue wins Frucor tax avoidance case in Court of Appeal
  • New Inland Revenue guidance on taxation of crypto assets
  • Labour’s tax and small business election policies announced

Transcript

Late last week Inland Revenue won a tax avoidance case in the Court of Appeal against Frucor Suntory New Zealand Limited.

The background facts are complicated, but basically the case involved an advance of $204 million dollars to Frucor in exchange for a fee and some convertible notes issued by Frucor to Deutsche Bank. There was a related party payment from Frucor’s then Singapore based parent for the purchase of the shares from Deutsche Bank.

Over a five year period Frucor paid Deutsche Bank $66 million dollars on an interest only basis. Inland Revenue argued to this was a tax avoidance arrangement and for the 2006 and 2007 income years disallowed deductions to the extent of $10.8 million and $11.6 million respectively.

Frucor won this case in the High Court in 2018, a decision which actually raised a few eyebrows in the tax advisor industry because it seemed similar to the arrangement struck down involving the big Australian banks about 10 years ago.

Unsurprisingly, Inland Revenue appealed and have now won in the Court of Appeal. Under the arrangement, Frucor had apparently achieved interest deductions totalling $66 million. But in the court’s view, it had not incurred a corresponding economic cost for which Parliament intended deductions would be available. $55 million as a matter of commercial and economic reality of the claimed interest was in fact a repayment of principal borrowed and not an interest cost. The Court concluded that the funding arrangement had tax avoidance as one of its purposes or effects and was this was not merely incidental to some other purpose. The overall purpose of the funding was provision of tax efficient funding to Frucor.

The only bright spot in this decision for Frucor is that the Court of Appeal agreed the High Court was reasonable to find that the shortfall penalties for a tax avoidance arrangement (which can be up to 100% of the tax avoided) should not have been imposed by Inland Revenue.

The key lesson here – and it’s going to be of importance looking forward if Labour forms the next government, given its announcement for a higher personal tax rate – is that the courts are still very much onside with striking down tax avoidance cases where they consider the arrangements are not seen to be in line with Parliament’s intention. And Inland Revenue has made aggressive use of tax avoidance provisions in section BG 1 of the Income Tax Act, and until Frucor’s High Court victory, it had not lost a case involving a tax avoidance matter for something like 10 years.

So aggressive tax planning is very much still under the gun for Inland Revenue and the courts are supportive of that approach, even though it might look as if all the necessary legal form has been satisfactorily met. So that’s just a warning for the times ahead. I think we’re going to see Inland Revenue make more use of anti-avoidance provisions in other areas as it returns to normal after its attention was diverted responding to the COVID-19 pandemic in the early part of this year.

Taxing crypto assets

Moving on, Inland Revenue has issued some updated guidance on the tax treatment of crypto assets. There’s nothing especially new here. It is confirming that crypto assets are to be treated as a form of property and that in each case it will look carefully at what are the circumstances behind the acquisition and disposal of the relevant crypto asset.

The guidance does expand a little bit more on what we’ve seen previously in this area.

Inland Revenue has said very clearly that it will look at the purpose for acquiring the crypto assets. And it is pretty straightforward in saying that if your purpose when acquiring crypto assets was to sell or exchange them, you will need to pay tax when you do so.

Inland Revenue will look very carefully at your purpose at the time you acquire crypto assets. The guidance repeats the key point, which is often overlooked, that it is the purpose at the time of acquisition that matters. If that purpose changes later on, that is not relevant. If you plan on selling or exchanging your crypto assets at some time in the future, then you have a purpose of disposal. It doesn’t matter how long you plan to hold onto them before doing so. Your main purpose can be to sell or exchange them even if it takes a few years. Then, of course, you’ve got to have supporting evidence of what your intention was at the time of acquisition.

And one of the things the guidance points out is the nature of the crypto assets being acquired. And in particular, does it provide an income stream or any other benefits while being held? (By the way, benefits isn’t clearly defined). Now, Inland Revenue’s view is that if you have crypto assets that do not provide an income stream or any other benefits, this strongly suggests you acquired them for the purpose of selling or exchanging them. This is because the only benefit you get is when you sell or exchange those crypto assets. And that, by the way, is similar to Inland Revenue’s position on gold bullion.

But just because you’ve got crypto assets that do provide an income stream or other benefits, for example, staking, that doesn’t mean that you didn’t acquire them for the main purpose or sending of sale or exchange. Somewhat helpfully, there are a number of examples of how the Inland Revenue sees these rules working.

So the position to be mindful of if you’re involved in holding crypto assets, is that the default position is almost that any funds realised on a sale or exchange are going to be taxable. To counter that, you’re going to need to show good records at the time of acquisition of what your intention was and what type of assets you acquired.

But this is the current position and we have to work with it. And so my advice is be very clear in recording what your intention is when you acquire crypto assets. And if you haven’t done that, it’s too late. Inland Revenue’s default position with crypto assets is that any sort of exchange is going to be taxable.

Election 2020 tax policies

And finally, Labour has now come out and announced its tax policy, the centrepiece of which is a new top income tax rate of 39% applying to income above $180,000. It’s also said that there will be a freeze on fuel tax increases, no new taxes and no further income tax increases for the entire next term of government.

The other point it’s raised is, is it going to continue to work with the OECD to find a solution on the taxation of multinationals? It’s prepared to go ahead with the implementation of a digital services tax, which present projections estimate would raise between $30 and $80 million yearly.

As can be seen there’s not a lot of tax involved with multinational taxation, but it’ll be a popular measure because it’s something that keeps coming up in conversations I have with people on the issue of taxation. People are always saying multinationals should pay more. But they’re not a bottomless well, and opportunities to tax them are limited.

The digital tax space is where there could be some movement. But that’s very much dependent on how the OECD goes. And as I’ve mentioned in the past, the Americans have pretty much brought that particular pathway to stop earlier this year by basically saying they weren’t going to cooperate or be involved

With the proposed income tax rate increase to 39%, we’ve been there before. I thought if Labour was going to raise the top tax rate, it would be to 39% percent. Crossing the 40% threshold would be a psychological barrier too far. We haven’t had an individual tax rate of more than 39% for over 30 years. 1988 was the last time the tax rate was above 40% when it was 48% as I recall. It’s expected to raise 550 million dollars.

There’s already a lot of talk going around about making use of trusts and companies to get around the increase. My understanding is they’re going to look at trusts and the trust tax rate. Conceptually, the trust tax rate should really rise to be equal to the top personal tax rate. And that’s the story in Australia, the UK and the US as well. But my understanding is trusts will be looked at to find out exactly how many trusts really would be caught by that, because there are trusts settled for minors and orphans and other charitable or semi charitable purposes.

But even if nothing happens in that space, I’ll just remind you about the first item this week, the Frucor case and the Inland Revenue’s approach to tax avoidance. Last time we had tax rates at 39% we ended up with the Penny-Hooper decision. That’s the case involving dentists who used a company to trap income at the company tax rate, which was then 33% and then then lowered to 30% instead of the personal 39% rate was struck down as tax avoidance. You can see that happening again.

So, yes, Labour seems to have opened an opportunity for tax planning. But my answer to that would be ‘Proceed with great caution’, because Inland Revenue has a big stick in the form of an anti-avoidance provision.

The other thing of note from Labour is that it’s campaigning on extending applications to the Small Business Cashflow Scheme to 31st December 2023 for ‘viable’ businesses.  And it’s also promising to extend the interest free period of loans under the scheme from one year to two years, which would be very welcome for small businesses. Labour will also look at a permanent iteration of the scheme, which is something I would support.

That’s it for this week. Thank you for listening. I’m Terry Baucher and this has been The Week in Tax. Please send me your feedback and tell your friends and clients until next week. Ka kite āno.

GST issues paper proposes change in GST treatment of crypto-assets

  • GST issues paper proposes change in GST treatment of crypto-assets
  • Retrospective change to treatment of donation tax credits
  • More on Inland Revenue’s decision to stop accepting cheques

 

Transcript

Early last week Inland Revenue released a GST policy issues paper.

The paper “covers a number of issues which have been identified where the legislation produces an outcome that does not reflect the underlying policy intent. The paper is designed to address those issues and maintain and in doing so, maintain the certainty and efficiency and fairness of the tax system”. And so what the paper does is outline technical issues that have arisen in the GST area and then suggesting potential policy options and solutions to those issues.

There’s a whole number of issues covered in here. For example, the paper starts off by talking about tax invoice requirements. Then there’s a discussion on the apportionment and adjustment rules which are complex and difficult to apply, and they’re looking to see how they can improve those set of rules. The apportionment and adjustment rules do cause headaches in the GST area. So another look at that area is always welcome.

There’s a proposal dealing with the treatment of GST and courier business practices where part of an international delivery is subcontracted. There’s an interesting proposal relating to business conferences and staff training.  The paper points out that for overseas businesses it’s impractical for them to register for GST to claim a GST refund for a one off expense of sending their staff to a conference or training course in New Zealand. This is something we’ve encountered from time to time. And it’s a deterrent to businesses who might want to come here for a tax conference or any other conference, actually, because if they don’t manage it correctly, then their costs go up by 15 percent. And from the perspective of a New Zealand conference centre this is also an issue for them because they may not be getting business they could otherwise expect.

The proposal here is to zero-rate conference and staff training services supplied to non-resident businesses. That’s a good initiative. It is also actually conceptually logical because if the conference is being carried out for business purposes, then a GST registered business would be able to recover the GST on that. So this proposal is sort of short circuiting that process.

There’s also commentary on managed funds, insurance payouts to third parties, some tweaking of the rules in relation to compulsory zero rating of land and various other remedial issues.

But the issue that’s caught my eye and is quite welcome is in relation to the GST treatment of crypto assets. Now, what the paper notes is that at present there are over 5,000 crypto-assets and the total global market value of all such assets is in excess now of over 300 billion U.S. dollars. But the GST treatment is very inconsistent.

GST was originally designed by the French way back in the 1950s as part of the forerunner of the European Union, the European Economic Community. The designers of GST didn’t ever contemplate crypto-assets and nor did our legislation which dates from 1985. And as the paper points out, crypto-assets have a very different GST treatment to either money or financial services. It’s not clear, for example, whether the supply of crypto-assets could either be an exempt financial service, subject to 15 per cent GST or it’s a zero rated supply to a non-resident. So there’s a lot of confusion on this.

And it’s a matter that we have been discussing with Inland Revenue and clients. Work arounds have been established, but there’s always a level of uncertainty. So we were looking for guidance from Inland Revenue from on the matter and this paper gives that by proposing to exclude crypto currencies from GST and the financial arrangements rules.

Now, the financial arrangements rules, as regular listeners will know, are a minefield for most taxpayers. It would certainly be a big problem for crypto-asset investors if Inland Revenue had decided that crypto-assets could be within the financial arrangements regime, because, given the volatility, many investors would probably be subject to being taxed on an unrealised basis. So good to hear they’re planning to clarify that this won’t be the case which is a big win for crypto currencies.

There’s another little win as well in that GST registered businesses raising funds through issuing security tokens or crypto assets, which, quote, “have features that are similar to debt or equity” such as a right to share of the profits of a project, should also be able to claim input tax credits on their capital raising costs. This is a good move, and it means that crypto-asset businesses are not disadvantaged if they wanted to try and raise capital through issuing crypto-assets which are a substitute for debt or equity.  That’s a good clear rule and also good to see this.

The paper also points out, inevitably, that income tax rules still continue to apply to crypto assets. These changes only relate to GST. The income tax rules set out in the Frequently Asked Questions issued last year will still apply.

Submissions on this issues paper close on 9th of April. If everything progresses as usual, you might see these proposals included in an omnibus tax bill released towards the end of this year. This means that all of this could possibly be in law by 1st of April 2021. Or maybe a little later than that if the omnibus bill is delayed, perhaps because of the election. Still this paper is good news for crypto-asset investors.

Moving on. As many tax practitioners will know, in dealing with Inland Revenue it’s often the case that it’s “Heads they win. Tails you lose.” And this can emerge where Inland Revenue, for example, loses a case in court and then promptly changes the law to what it thought should have been the result.

And this is about to happen. Late last year, the Court of Appeal ruled in the case of Commissioner of Inland Revenue vs. Roberts that a gift of forgiveness of debt made to a charitable trust which was progressively forgiven and donation tax credits claimed, represented money and therefore qualified for the donations tax credit.

In the case in question, Mr and Mrs. Roberts had transferred $1.7 million to a trust by way of loan and then started executing deeds of gift, releasing the trust from the liability to repay specified amounts of that loan and the trust then claimed a tax credit on the basis that the forgiveness of debt was a charitable gift. And the High Court said, “Yes that’s acceptable” and the Court of Appeal upheld that decision on the 17th of December.  Immediately Inland Revenue said we’re going to change the law so it’s only gifts of cash that can be eligible for the donation tax credit.

And this week, the Government has released a Supplementary Order Paper to a tax bill going through Parliament right now, which addresses that matter.

Now, it’s arguable that what Mr and Mrs. Roberts did was pushing the envelope a little bit. But the question of the treatment of gifts in kind is a live one. I encountered one such case recently where a charity was saying, well, what if the building owner was to give us the use of the property rent free? Is that eligible for the donations tax credit? And I said “No it has to be in cash.”

So this is a matter that does pop up from time to time. There’s also some GST rules around this which are a little unclear. So, on the one hand, some clarity around this rule is to be welcomed. But I can’t help but wonder if Inland Revenue are just taking an overly draconian approach here, because as I said, there are other alternatives where gifts are being made in kind and maybe the donors should be getting a tax credit for that, perhaps you might want to go for a reduced tax credit.

But there’s a second issue here, which is also of concern, and that is because this is a Supplementary Order Paper to an existing tax bill, opportunities to submit on the bill are therefore basically being sidestepped. Now this happens from time to time in our legislative process. But it’s not the first time this has happened in this Parliament. And I’m personally not in favour of seeing stuff like this happen because these are issues that Inland Revenue probably knew about anyway and probably should have raised beforehand.

Obviously, Inland Revenue was expecting its appeal would be successful and therefore wouldn’t have necessarily put something forward. But maybe it should have done so to bring these issues out for discussion. As it is, it’s lost a case and has then decided, “Well, we’re not going to have that because it’s arguably a threat to the integrity of the tax base. But it’s also not what we consider to be the underlying policy’s intent”. Maybe it’s Parliament’s job to determine what the underlying policy intent is and as such, in a democracy, maybe we should have got more input into that matter.

And finally, speaking of getting some input into the matter. The decision by Inland Revenue and other agencies such as ACC, to stop accepting cheques in payment as of first of March is still rumbling on. And a couple of things happened this past week in relation to that.

Firstly, I got contacted by an international website, Tax Notes International, which is based in the United States. The journalist, in fact, was in New Hampshire and he expressed quite a bit of surprise at what was going on about that money. He pointed out, not unreasonably, that the fact that 424,000 cheques were received during the year to 30th of June 2019 is not an insignificant number in relation to a population of five million. He thought Inland Revenue’s action was quite offhand in that respect.

But he had also sought some feedback from Inland Revenue on the issue who and they said that it has received 160 requests for exceptions to this rule so far.  It has accepted 76, turned down 22 and are in the process of reviewing the other 62 requests.

Then Andrew Bayly, the National MP for Hunua and a member of the Finance and Expenditure Committee, made the opening address at the Accountants and Tax Agents Institute of New Zealand’s annual conference last Friday in Taupo. (Excellent conference by the way).

He raised this issue and he has begun a petition to overturn the decision by Inland Revenue and other government departments on the matter.

I’m supportive of that. I don’t agree with the decision. I think the use of cheques will peter out anyway. But government agencies are imposing arbitrary costs on their “customers” when we have no choice in the matter. We can’t exactly go to the Australian Tax Office or the US Internal Revenue Service and use them instead. Inland Revenue is actually kicking the costs across to ourselves as tax agents and the taxpayers and just for its administrative convenience, and that’s unacceptable.

So keeping the pressure up, I have written to the Minister of Revenue and the Commissioner of Inland Revenue on the matter. Don’t hold your breath, but I think we need to keep pressing away at that. It could be that Inland Revenue may decide to relax the rules around the requests for exceptions.  But let’s watch this space and see.

Finally, on a personal note, I was very honoured and frankly humbled to receive this year’s President’s Award at the Accountants and Tax Agents Institute of New Zealand’s (ATAINZ) Annual Conference. It is a huge honour and I’d like to thank the ATAINZ Board and all its members for their support of my activities over the past few years. I’d also like to thank my wife Tina and my colleagues here at Baucher Consulting Ltd, Eric, Judith and Darryn, without whom this wouldn’t have been possible. Thank you all very much.

And on that note, I’m Terry Baucher and this has been the week in tax. You can find this podcast on my website www.baucher.tax or wherever you get your podcasts. Please send me your feedback and tell your friends and clients. Until next time have a great week. Ka kite āno.