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June 2018

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GST Warranties in S&P Agreements

The Court of Appeal has sent a very clear message on GST warranties in sale and purchase agreements.  That message is, whether you are a purchaser or vendor, you should read carefully and understand the agreement for sale and purchase before signing it.  In the case discussed, the Vendor circled “no” to the question whether they were GST registered in relation to the specific transaction and ended up in the Court of Appeal.

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Ring-fencing of Residential Rental Losses

Many of you will be aware of the Government's proposal to limit the ability to offset losses from residential rental properties against other sources of income.  We recently made a submission to IRD on this proposal.  We strongly oppose the policy which in our view lacks rationale and is based on political ideology.  The rules are poorly targeted and will result in unintended consequences. 

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Leaky Buildings - The Conundrum

Many of you will have experienced the IRD’s hard line when it comes deductions for “repairs” to so-called leaky buildings.  Despite what is said in public policy statements, IRD’s current practice is to simply disallow deductions on the basis they are capital in nature.  They are generally not interested in entering into any discussion around the issues, instead suggesting taxpayers enter into the formal disputes process and risk penalties if they are wrong.  nsaTax is actively involved in a number of leaky building disputes and are unconvinced by IRD’s approach.  However, the current ad hoc uncoordinated approach by taxpayers suits IRD’s tactics perfectly.

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