Proposed Tax Changes For Foreign Superannuation Schemes

Jim MartinIf you have lived in New Zealand for over four years and you still have a Foreign Superannuation Fund and haven’t paid any New Zealand tax on it – it might be beneficial to either cash-up the fund or transfer it to a New Zealand fund, before 1st April 2014.

These considerations arise from future changes designed to simplify the taxation of foreign superannuation schemes and are planned to take effect from 1st April 2014.

The current rules tax foreign superannuation schemes under the Foreign Investment Fund (FIF) rules, which due to their complexity, result in a high level of non-compliance.

The new rules will contain transitional provisions for lump sum pay-outs or transfers to New Zealand Schemes made between 1st January 2000 and 31st March 2014.  In cases where these pay-outs and transfers have been made from foreign superannuation schemes which have not been taxed under the FIF rules, a 15% transitional fraction will be applied to the pay-outs or transfers to calculate extra assessable income of the individual.

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Xero Is Approved By IRD

On 11th September 2013 the Inland Revenue Department announced that Xero is now legally allowed to store taxpayers’ records outside New Zealand on behalf of its customers (click here for article).  Xero was the first cloud-based accounting software company to become street legal and we understand that MYOB has also recently been approved.

The growth of Xero has been phenomenal with revenues hitting $39 million to 31 March 2013, up from $19.4 million on the prior year.  Clearly the ‘software as a service’ model is popular with small businesses, Xero’s primary target market.  Hopefully as their customer numbers continue to build they will eventually turn their $14 million loss into a profit.

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New Rules That First Home Buyers Need To Know

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Stuart Wills of Mortgage Link explains the options available to first home buyers.   

 

Earlier this month the new rules pertaining to low equity loans officially came into play for New Zealand banks.  This means the bank is now restricted to doing just 10% of new lending as low equity lending.  Any lending with less than 20% deposit is deemed as low equity.

This new rule is a measure introduced by The Reserve Bank who stated it was implementing measures to curb the amount of high-loan-to-value mortgage lending from 1st October, and these are “designed to help slow the rate of housing-related credit growth and house price inflation, thereby reducing the risk of a substantial downward correction in house prices that would damage the financial sector and the broader economy.”

But first home buyers are finding it is now harder to get a mortgage.

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