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taxInsight - 2015/08 – May

2015/08 – May from taxInsight

New Rules for Foreigners buying New Zealand Property

On 16 May, the New Zealand Finance Minister announced that from 1 October 2015, gains on residential property in New Zealand sold within two years of purchase will be subject to a new “bright  line” test, which will be introduced in respect of residential property. There will be a rebuttable  presumption that if you sell property within two years of buying it, you did it to make a profit.  This  means that you are presumed not to hold it on capital account.  Instead you hold it in the nature of   trading stock and therefore any profit is fully taxable.  There will be only narrow grounds for rebuttal. Non-resident buyers must have a New Zealand bank account and Inland Revenue tax identification  number.  They also must disclose their tax identification number from their home country. Exceptions to the bright line test are: The property is the seller’s main home The property was inherited from a deceased estate or The acquisition was pursuant to a relationship property settlement The New Zealand Government will investigate introducing a withholding tax for non­-residents selling  residential property from mid ­2016.

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Revenue Authorities focus of taxing offshore income

The Tax Office launched a voluntary disclosure program which was called “Project DO IT” (disclose offshore income today) on 27 March, 2014. Errant taxpayers had until 19 December 2014 to come forward with details of untaxed offshore income and assets. Those who did were subjected to tax going back only four years and had their penalties reduced to 10%. This was announced as a precursor to more aggressive action by the Tax Office whose efforts are being bolstered by improved information sharing arrangements with an increasing number of countries. Many countries who relied on secrecy to attract investments and trade […]

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New Significant Investor Visa available

The previous Federal Government introduced a new Significant Investor Visa which targeted migrants who could make an investment of at least $5 million in the Australian economy. This was thought to make it easier for investors coming to Australia. Under this program investors would not have to meet a points test and had reduced residency requirements. Investments could be made in State and Territory bonds, ASIC regulated managed funds and direct investments into Australian companies. During the period from inception on 24 December, 2012 and 31 March, 2015 a total of 1,679 applications under this program have been lodged and […]

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