Electric Vehicles & FBT
The Income Tax Act 2007 has been amended by inserting a definition of clean vehicle discount scheme into s YA 1.
Schedule 5 (which deals with the fringe benefit values of motor vehicles) has been amended to clarify that, for fringe benefit tax purposes, the cost of the motor vehicle in relation to which a payment under the clean vehicle discount scheme is received by the owner is net of the amount of the payment. This amendment to the Income Tax Act 2007 is deemed to have come into force on 1 July 2021.
COVID 19 & TAX RESIDENCE COV 22/12
This variation allows a natural person who is New Zealand resident for tax purposes only by virtue of personal presence in New Zealand, and who may otherwise become non-resident because they are absent from New Zealand, to ignore any days that they were unable to return to New Zealand because of the imposition of COVID-19-response measures or as a consequence of COVID-19. An affected person should carefully read the conditions attached to this variation.
MAIN HOME EXCLUSION FOR BRIGHTLINE PURPOSES FOR HOMES OWNED BY THE FAMILY TRUST
It is important to remember that the exclusion applies to one property only, whilst in most cases a family home owned by a Trust will be excluded, situations can arise where this is not the case.
The most common situation will be where parents advance funds to their child’s trust for the purposes of acquiring a home. In this case the parents are likely to be the principal settlors of the child’s trust as they provide the most funding on an interest free basis. As they are the principal settlors and have a home of their own either in their personal capacity or in another trust, the home owned by the child’s trust will not qualify as a main home for the purposes of the brightline exclusion and suddenly the property will need to be held for 10 years or be subject to tax if sold within 10 years of acquisition.
March 2022
