The following expenses are not deductible for tax purposes:
- IRD penalties including late filing and late payment penalties.
- Parking and speeding fines.
- Premiums relating to personal sickness or accident insurance policies.
From February 2008 changes were made to the application process for IRD numbers for individuals. From that date a tax agent was no longer able to apply for an IRD number on behalf of an individual. Under the new process, identification documentation (along with form IR595) must be taken by the individual to an Inland…Details
The 2012 tax year commenced on 1 April 2011 so now is a good time for investors to check that their investment income for the new tax year is being taxed at the correct rate.
If the wrong rate is used to tax investment income it can result in an unwanted tax bill at the end of the year, and in the case of a Portfolio Investment Entity (PIE) if the wrong Prescribed Investor Rate (PIR) is used it can result in the investor paying more tax than they need to.
If, after checking the tax rates below, an investor feels that they are using the wrong rate they should contact their investment provider and discuss with them accordingly.
Resident Withholding Tax (RWT) Rates
Resident withholding tax is deducted from interest income. The appropriate RWT rates for the 2011 – 12 tax year are as follows:
Individual RWT Rates for the 2011-12 tax year
|Income||RWT rates for
|$0 – $14,000||10.5%|
|$14,001 – $48,000||17.5%|
|$48,001 – $70,000||30%|
|$70,001 and over||33%|
Family Trust RWT Rates for the 2011-12 tax year
A family trust has the option of taxing its investment income in the name of the trust or distributing income to beneficiaries where it is taxed at the beneficiary’s marginal tax rate. A family trust therefore has the following options when selecting which RWT rate to use.
Family Trust RWT rate where the income is taxed in the name of the Trust
|RWT rates for 2011-2012
Where the income earned by a family trust is to be distributed to a beneficiary a trust can elect one of the following rates.
|RWT rates for 2011-2012 income years|
|Elected rate where beneficiary income under $14,000||10.5%|
|Elected rate where beneficiary income between $14,001 – $48,000||17.5%|
|Elected rate where beneficiary income between $48,001 – $70,000||30%|
|Elected rate where beneficiary income $70,001 and over||33%|
Company RWT Rates for the 2011-12 tax year
|RWT rates for 2011-2012
|Company default rate||28%|
Note a company also has the option to elect an RWT rate of 33%
Partnerships RWT Rates for the 2011-12 tax year
Provisional tax payments are a payment on account, once the tax year is complete a provisional tax payer is required to complete a tax return to establish their actual tax liability for the year, any provisional tax paid is deducted from the tax liability calculated to give the terminal tax to pay or to be…Details