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The current tax Bill before parliament which was introduced on 8 September 2022 includes a major overhaul of the bright-line rollover relief rules relating to residential land.   After just 6 months of the rules being operational (they applied to transfers of residential land on or after 1 April 2022), IRD have realised they rules were ineffective and did not meet policy intent.

There is a developing trend of IRD taking an extremely hard line approach to allowing GST input claims on first time developers.  In our view, IRD unreasonably require taxpayers to evidence significant progress towards implementing a coherent subdivision plan before any input claims will be allowed.

The Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill proposes significant changes to the GST apportionment rules, with a move back to a principal purpose test in some circumstances.  The changes will simplify the process of making GST adjustments by allowing a GST input tax deduction for low value assets ($10,000 or less) to be based on the principal purpose test with no further adjustments required.

We can assist with valuation of businesses and shares to support shareholder transactions, merger and acquisition activities and relationsihp property matters.

Please contact Bruce Watt (brucew@nsatax.co.nz or phone on
09 309 6505).