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"Mark has been working with me since May 2004 on many aspects of my business.
He is very approachable & offers me practical advice and his communication skills are excellent. I would have to say Mark gives his all and is determined to help his clients succeed".
Phil Goad, Owner, www.earth-garden.co.nz
"Mark Gwilliam and his team at Business Advisory Accounting & Tax Services has been my full service accounting department for many years for my companies.
I rely on the fast, friendly and accurate information they provide me to analyse and concentrate on running my business. Any information that I need is readily available. To eliminate the costs and hassles of in-house accounting, I highly recommend Mark's team."
Sina Mead, Engineering & Industry Training Ltd
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25.03.2010
by Mark
Gwilliam
Welcome to the Business Advisory Accounting & Tax Services (BAS) website and thank you for visiting.
We’re a firm of Chartered Certified Accountants based in Auckland with clients all over New Zealand. We provide high-quality accounting, tax and business advisory services at affordable rates to small and medium businesses.
Before I introduce us, I’d like to clear up some common misconceptions and then I’d like to focus on how we can help you.
I want to dispel these common misconceptions you may have about accountants:
- Top flight accounting & tax services are intended only for large companies and are out of reach for small and medium businesses – Not with us. We use our skills and experience to focus on helping small to medium sized businesses like you;
- It’s okay to economise on these services in order to save money – It’s not always the case, but we recognise that we need to add value;
- Accountants that provide accounting & tax services are primarily interested in inflating their billings as much as possible – Again, not with us as we pride ourselves on our transparency and encourage you to compare our fees with others. We don’t hide anything.
Like many, I’m sure you’ve experienced frustrations with your accountants such as these:
- “My accountants just don’t seem to care – I’m just a number”
- “Now and then, all I need is some practical business or tax advice – not just mumbo jumbo bean counter language”
- “I quite often want information that will help me but I can never it in one place”
- “I wish I had accountants who understood what I need”
Please allow me to explain how we’re different.
I urge you to regard our fees as a tax deductible business investment, not an expense. As a prudent business owner, we’d like you to make your decision on which accountants & business advisors you hire based on the return on your investment or value added;
Some key benefits that we bring to the party that I’d like you to consider are:
- We want to save you time and effort (not to mention stress) to concentrate on what you know best, whilst leaving accounting, & tax to dependable and efficient specialists;
- We want to achieve maximum tax savings for you;
- We know that you’re keen to know exactly what your accountants’ fees are, so you can make informed decisions and budget for them accordingly;
- We know that you’d welcome a personal service that’s tailor-made to your specific requirements;
We understand that you want confidence that your tax returns and other returns are being handled by professionals who will file them correctly, and on time.
At BAS, we have a competent, friendly team of accountants & tax professionals who are committed to making all of the above happen for you, with unparalleled levels of dedication and integrity.
Since we’re committed to “walking our talk”, I’d much rather offer you a concrete demonstration of our skills.
So why don’t you get in touch with us on 09 449 0417 and let us show you that some accountants really do care and want to help you succeed.
29.08.2010
by Mark
Gwilliam
When the Government announced in the May 2010 Budget that Goods & Services Tax (GST) will increase, with effect from 1 October 2010, it probably seemed a long way off to you then.
But with that date fast approaching, you’ll hopefully have begun to consider the impact that it will have on your business. These changes will affect your business and you’ll need to take action to ensure that you are prepared for them.
The GST rate will increase 2.5% to 15.0% for all goods and services supplied on or after 1 October 2010. Generally, there are no transitional provisions and all businesses should apply the new rate to goods supplied and services performed on or after October 1 2010.
Filing your GST return
If you file GST returns monthly, 2-monthly or 6 monthly and your GST period ends on 30 September 2010, you’ll need to file your return as normal, accounting for GST at 12.5%.
If you file GST every 2 or 6 months and the period straddles 1 October 2010, the IRD will send you 2 GST transitional returns – one covering the period ending 30 September 2010; and one covering the period commencing 1 October 2010.
Using the correct GST Rate
The correct GST rate that you must use will depend on what’s called the “time of supply”, which is the earlier of when payment for a supply of goods or service is made or the date an invoice is issued.
* If the time of supply happens before October 1 2010, you must use 12.5%. It does not matter if goods are delivered (or service performed) after 1 October
* If the time of supply happens after 1 October, you must use 15.0%.
Payments based adjustments
If you account for GST on a payments/cash basis or hybrid basis, you must use the new 15.0% GST rate for payments you make and monies you receive after 1 October 2010. To accommodate the rate increase, you’ll need to make an adjustment in your GST return that covers the September 2010 period.
* If you file monthly, 2 monthly or 6 monthly and the period ends on 30 September 2010, you will do this in your normal return for that period
* If you file every 2 months or 6 months and the period spans 1 October 2010, you’ll do this in your transitional return.
The following examples may help:
Example 1:
You account for GST on a payments/cash basis and your payment terms are 14 days. On 28 September 2010 you supply 100 widgets for $675.00, including GST. Your customer pays you on 10 October 2010.
Using the old 12.5% GST rate, you would have calculated $75.00 for the GST component. However, because you were paid after 1 October 2010, the GST component is actually $88.04 ($675.00 multiplied by 15/115).
Of course, if you weren’t allowed to make an adjustment, you’d have to pay the IRD an additional $13.04 ($88.04 less $75.00). You will be allowed to make an adjustment in your GST return for the period ended 30 September 2010 for the difference, so that you effectively pay only $75.00 GST on the sale.
Example 2:
Again, you account for GST on a payments/cash basis. Your GST return period ends on 30 September 2010. On 1 October 2010 you identify that you owe your creditors $9,200 and you are owed $6,750 from debtors.
The GST component of your creditors’ invoices is $1,022.22 ($9,000 multiplied by 12.5/112.5) under the old rate and $1,200.00 ($9,200 multiplied by 15/115) under the new rate – a difference of $177.78.
The GST component on the amount of your debtors’ balances invoices is $750.00 ($6,750 multiplied by 12.5/112.5) under the old rate and $880.43 ($6,750 multiplied by 15/115) under the new rate – a difference of $130.43.
In the above example, as your creditors’ balance exceed your debtors’ balance, you’ll need to account for an additional GST adjustment of $47.35 ($177.78 less $130.43) in box 9 on your 30 September 2010 GST return. If your debtors were larger than your creditors, you’d need to account for the difference in box 13 on your 30 September 2010 GST return.
Entertainment expenditure
You are obliged to make an adjustment for any non deductible entertainment expenditure, for income tax purposes. For GST purposes, any non-deductible entertainment expenses are considered to be supplied on the day that your income tax return is due or the date that it’s filed – whichever one is earlier, regardless of when you actually incurred the entertainment expense.
For the income tax year ended 31 March 2011, you may use the 12.5% GST rate for non-deductible entertainment expenses incurred prior to 1 October 2010 and the 15.0% rate for subsequent expenditure. Alternatively, you may use the 15.0% GST rate for the entire entertainment adjustment.
Inland Revenue Audit activity
During the Budget, the Government also announced that it has allocated the IRD an extra $113.9m to fund more audits. To ensure that you do not incur any unnecessary penalties and interest, I encourage you to thoroughly review your existing systems and processes to accommodate the GST rate change.
If you’d like to discuss any of the points covered in this article or discuss how the increase to 15.0% GST may impact your business, please don’t hesitate to contact us or visit www.ird.govt.nz/changes.
16.08.2010
by Mark
Gwilliam
Small business owners often choose their accountant without doing the right kind of homework or even giving it careful thought.
Unfortunately, if you have selected the wrong kind of accountant for your particular requirements, unless you do something about it immediately, it becomes exceedingly difficult to switch at a later date. Your accountant becomes familiar with your financial affairs and the cost of switching can be high. There is also the problem of inertia because you are reluctant to disturb the status quo. It makes sense, therefore, to choose the right accountant from the outset.
Many experts announce that selecting the most appropriate accountant is equally as important as selecting the right doctor. The most appropriate accountant should help you structure your business properly; benchmark your business with similar types of businesses and ‘diagnose’ problems that have been known to cause so many other small businesses to fail. The right accounting firm should be able to help you determine the most appropriate financial strategies to follow. Integrity is an important consideration because you would expect honest unbiased advice. Some people believe that 60% of your chosen accountant’s business should come from the same type of business as yours.
Find a chartered accountant to whom you can relate.
While professional skills and quality of advice are important, personality is equally important and you should feel comfortable discussing your financial affairs. Your accountant should also take a genuine interest in your business and be pro-active in all the services that they render. Ask for a free consultation with several accountants to determine your degree of comfort.
You also need to be clear in your mind as to exactly what kind of support you are seeking. Some accountants will only provide accounting and taxation support while others will include a wide range of business consulting services. Generally speaking, a small accounting firm that can provide personalised service is the best fit for a small business.
Ask what your chartered accountant can do for you. Because this is a two-way business relationship, don’t feel shy about establishing exactly what your accountant can do you. At the very least, they should save you enough money to justify your investment in their fees.
Ideally, they should be able to do a lot more – such as introducing you to potentially useful contacts from their network, such as lenders for your business. They should also be providing ongoing business advice to optimise your business operations. If your entrepreneurial style is aggressive, find an accountant with a matching style.
Above all, don’t choose the accountant with the lowest charges. You want a competent professional and not a glorified bookkeeper. Keeping in mind that this is an investment and not an expense, look for the maximum return on your investment from your accountant.
10.08.2010
by Mark
Gwilliam
One of the most important pieces of advice that a business mentor will give you is the necessity for business planning.
A business mentor will also tell you that, as with all fashionable buzzwords, there is much nonsense talked about the subject of business plans and models. And your business mentor should clarify what the associated terms mean or do not mean.
First, you should understand what planning is not. Planning is not budgeting, and you do not achieve a plan by merely extending figures over a number of years. Budgeting is an invaluable short term management and control tool for a limited future period – normally the following year.
Planning is the process of forecasting what would happen over the next few years. The “normal” planning period is five years, which is a time span associated with many cyclical activities, such as elections.
But why would you want to try looking into the future when it seems akin to crystal ball gazing? Many major decisions, such as capital investment or new product launches, have a long-range impact and the least you can do is to examine how these will affect your business. Unlike budgeting, this cannot be achieved by a mere straight line extension of past figures because you will require a number of “what- if” scenarios…
A business plan normally has three elements, objective, strategy and conduct.
A business objective defines what you’re trying to achieve and is normally expressed, in terms of value creation. These measures would typically be return on capital employed (ROCE) and return on equity. Ideally, your business objective should be a single measure so as to provide focus.
Strategy is one of the most misused and misunderstood terms in management jargon. If objective defines what you want to do, strategy defines how you’re going to do it. It is evident that a strategy cannot exist in limbo and is meaningless without a well-defined objective.
So much for all that loose talk about strategy on its own.
Business conduct is not well understood and much writing on business planning makes no reference to it. I dislike the term business ethics since this seems to imply some lofty standard of behaviour.
In real life, businesses can and do behave just like people. They can be intelligent, stupid, and so on. And it is surprising how a collection of otherwise sensible people can behave when organised collectively as a business. The importance of the people factor lies simply in the fact that they are the ones that will implement the plan. Any plan that does not take business conduct into account is guaranteed to fail.
In the process of business planning, you need an overall objective view of your business and you should certainly use the skills of your business mentor.
05.08.2010
by Mark
Gwilliam
The importance of choosing the right accountant cannot be over-stated.
If you are a small business owner, no day seems long enough to accommodate all that you want to do. In all probability, you are a “one-man band” who wears many hats and has to handle everything from sales and marketing to purchasing and administration. The best way to tackle this problem is to prioritise and decide what you need to do yourself and what is best done by outsourcing work to other specialists – such as an accountant.
Almost certainly, you are unlikely to have accounting and tax expertise and this is a job that you should immediately trust to an outside expert. No matter how small your business, the right accountant is an invaluable business partner who can add value in many ways, beyond the obvious services of accounting and tax. They will be a highly competent professional and examples of the areas where they can assist you are:
Accounting services. Like many small-business owners, you may have considered maintaining the books of accounts yourself and this is no bad thing because it will give you hands on familiarity with every aspect of your business. However, it is wise to consider outsourcing – simply because it might take up a good deal of your time that would be better used elsewhere. One way to handle this problem is to ask your accountant to choose a good accounting software package that is easy to operate and implement.
Tax services. A good accountant will be pro-active about your tax planning and, well before the end of the year, they should be consulting with you to structure your business for maximum tax efficiency. You should, however, ensure that they do not flirt with the limits of tax laws and use dubious tax loopholes that could land you in trouble later. They could save you quite a bit of money on tax that you might have otherwise unnecessarily paid.
Business advisory services. An accountant can be a great help when it comes to designing and implementing business systems so that your business can run more smoothly. They can help you carry out a cost benefit analysis to ensure that any investment in your business will have a positive impact on your bottom line. They can help you draw up business plans that will serve as a blueprint and a guide. Finally, they can help you identify sources of finance and assist you when negotiating and finalising your funding.
As you can see, building up a mutually rewarding and fruitful relationship with your accountant will have immense long-term benefits. As they gain better understanding of you and your business, encourage them as part of their accounting services to be pro-active in suggesting ways to improve your bottom line. On your part, for any decisions that have major financial ramifications, you should seek to consult your accountant before making them.
07.06.2010
by Mark
Gwilliam
In the build up to last month’s budget, the government made no secret that it wanted to overhaul the tax treatment of residential property investments.
In his 2010 budget, Bill English summed up the property investment aspects of his budget as an effort to introduce a fairer tax system to ensure that the tax treatment for investment properties is consistent with other types of investment.
This article sets out a summary of the changes that will impact residential property investments.
Changes to depreciation
With effect from the 2011-2012 income tax year, residential (and commercial) landlords will no longer be allowed to claim depreciation allowance for buildings with an estimated useful life of 50 years or more. Under existing rules, landlords, property investors generally claimed either a 2% or 3% deduction on the purchase value of the building.
With immediate effect, the 20% loading on some plant and equipment (P&E) has been removed on all new P&E bought since 20 May 2010.
Changes in how Loss Attributing Qualifying Companies (LAQCs) are treated
LAQCs have long been a popular structure for many New Zealander residential property investors. The main attraction has been that losses could be deducted to reduce LAQC shareholders’ taxable.
These are going to be changed. But, currently, there isn’t enough information available on how the new LAQC regime is going to work. Bill English commented that, after after a brief consultation period, new legislation will be introduced so that, with effect from 1 April 2011, LAQCS will be taxed as limited partnerships. Submissions will close on July 5 2010.
Tax losses will continue to be attributed to shareholders, but taxable profits will also be attributed to those shareholders and not retained within the company. Therefore profits may be taxed at the shareholders’ top personal income tax rate of 33%, rather than at the lower company tax rate of 28%.
Changes to GST
With effect from 1 October 2010, GST will rise from 12.5% to 15.0%. This will have a real impact on residential investment property owners as the cost of insurance, rates, property management fees, and professional services will increase.
As many residential investment property owners are not normally registered for GST, they will not be able to claim back the GST component of these expenses. So unless rent is increased to offset these additional costs, residential investment property owners will see less cash in the bank.
The changes to depreciation on buildings may have major cash flow implications. Added to that, the changes to the LAQC regime are wide reaching.
If you are an investment property owner, you should contact us to review your property investment portfolio. You’ll need to consider the implications these changes will have for you. You should also seek advice before buying more investment properties or changing existing ownership structures.
The IRD has recently indicated that it intends to increase its audit activities on investment properties and will investigate these transactions more regularly.
17.05.2010
by Mark
Gwilliam
Everyone knows that tax, like death, is inevitable. Are you going to take the attitude that because it is inevitable, you are going to do nothing about it? Do you really know how much you shell out in income tax and other taxes every year? Nobody is suggesting that you evade taxes but wouldn’t you like to reduce them to the minimum? Do you know and appreciate the difference between tax avoidance and tax evasion?
What does your liability for tax actually mean? Let us for a moment places your tax payment in perspective with your other expenses. Some statistics from the US suggest you spend about 17 percent of your income on housing and a little over 11 percent on medical expenses. Food and transportation will cost you roughly eight percent each. All this is however dwarfed by your tax payment which accounts for fully 32 percent of your income. If you feel that you are getting a raw deal, you are absolutely right because the government takes away in taxes as much as you spend on housing, transportation and food combined. When you talk about economising, you generally look at items of expense but shouldn’t you really be looking to save money on the #1 culprit-your tax payments?
Change your attitude about taxes. Do you want to continue to do nothing about your taxes because that is what is the fellow next door is doing? Or do you hate these unnecessary payments with a vengeance that makes you determined to do something. Recognizing that you can do something about paying unnecessary taxes is the first step to solving your problem. Are you now worked up enough to read on?
Saving on taxes pays long-term dividends. Let us assume that you find some tax saving strategy that will save you $4000 every year. If you invest this money every year for 30 years and you can manage an annual return of 11.5 percent every year you will accumulate over $1 million at the end of 30 years. Even if you can save only $2000 every year, you will still end up with a retirement nest egg of over half a million dollars. Certainly nothing to be sneezed at. Even more important, you have not cut your spending because the money has come from the government who would otherwise have taken it as taxes.
Devise your tax saving strategies: there is plenty of information available on how to save tax either on the Internet or in your local library. It is worth your while to do your research so that even if you identify several small savings, the cumulative effect on your financial position justifies spending time on it. Or you could simply go to a tax expert who will devise these strategies for you.
In this case, it is no exaggeration to use the old cliché that time is money. Get started on your efforts right away by hiring a quality tax expert and then let your savings multiply out of your taxes.
29.04.2010
by Mark
Gwilliam
A good accountant can save you money on your tax by helping you to organise your affairs properly and to take advantage of all the possible tax deductions that are available. If you are running a small business in New Zealand, you are unlikely to have the knowledge or experience to manage your own tax affairs. When you consider return on investment, the fees that you pay a top-flight accountant will probably be one of the best investments you make.
However, even the best accountant is no magician, and unless your financial affairs are recorded and documented properly, there is not much that they will be able to do. You should also remember that the New Zealand IRD prefers that you appoint a tax agent (normally a chartered accountant) to administer your tax affairs.
The first step is therefore to organise your accounting and recording system in a manner that will minimise the difficulties of preparing your tax returns.
Here are some simple tips on how to organise your paperwork instead of stuffing it into the nearest available shoebox or desk drawer:
- Prepare and label folders for each month of the year. Place every piece of relevant paper in the appropriate folder. Whenever you have a little time, you can arrange the contents of a folder, and itemise income and expenses.
- Consider acquiring a corporate credit card to which you can charge all your expenses. The credit card company will present you with comprehensive and neatly itemised bills, in effect doing your dirty work for you.
Let us now consider a few ways in which you can reduce your tax bill. A chartered accountant is the best guide, so rely on their advice.
Bring forward planned expenditure: If you happen to be planning to spend money on marketing or refurbishment and redecoration, incur the expenditure immediately. You need to spend the money anyway and doing it immediately will give you a nice little tax break.
Take advantage of capital deductions: Bring forward expenditure you plan to incur on items such as machinery or other fixed assets. In consultation with your chartered accountant, pick items that will give you the highest possible depreciation benefits. If you plan well, it is possible to find items that will give you tax benefits of 100 percent.
Do you really want to go on paying more tax than you should? If not, employ the services of a high-quality accountant and start planning your New Zealand tax.
29.04.2010
by Mark
Gwilliam
If you are running a business in New Zealand, you are liable to pay tax on profits after deducting allowable expenses from your income. Many people have an irrational fear of tax issues but if you familiarise yourself with the process and the regulations and hire a competent accountant to help you with compliance and planning, you can maximise your tax efficiency.
The New Zealand Inland Revenue Department (IRD) expects you to submit a properly completed tax return every year and this is in turn based on your annual financial statements. The department prefers you to have a tax agent (normally a chartered accountant) to handle your tax affairs. If this is the case, they will normally allow you an extension up to 31st of March of the following year to file your return.
If you fail to meet this deadline, you will find yourself in an unpleasant situation with the following consequences:
- You could face penalties and “Use of Money Interest”.
- You will probably lose your “Extension of Time” with your tax agent.
- If you continue to flout IRD regulations, you could face stiff monetary penalties and possibly criminal charges.
Instead of delaying or being paralysed by fear, take decisive action and contact your accountant or your tax agent immediately. The process is not as complicated as you think. And you should let your accountant take charge of the process. Here is a sample of the kind of information you should provide to your accountant for the preparation of the tax return.
- The details of any major property transactions
- Complete bank records and bank statements
- The details of all cash transactions
- Your general ledger, if you have one
- The details of your accounts receivable and your accounts payable
- Details of the inventories, fixed assets and motorcars
Your accountant will have more detailed requirements which you should fulfill scrupulously. We generally send our clients checklists that help them collate the information we need and keep our fees down.
How to select a tax agent
Planning your tax affairs to minimise the strain on you and maximise your tax efficiency depends almost entirely on your choice of the chartered accountant to act as your tax agent. What you need is pro-active and efficient advice. Your accountant should:
- Stay in touch with you to inform themselves of how your business is going
- Provide you with input on major investment and financial decisions to maximise your tax advantage
- Help you to prepare a business plan and to monitor the progress in accordance with the plan. This will ensure that you can take timely corrective action as required.
- Help you to maximise your operating efficiency and streamline your cash flow.
Stop spending sleepless nights worrying about your tax affairs. Find yourself a top-flight accountant who can shoulder some of your worries and assist in efficient management of your tax.
29.04.2010
by Mark
Gwilliam
Your accountant will tell you that small business enterprises are the backbone of the New Zealand economy and are the biggest employers in the country.
Ninety percent of these enterprises employ less than 20 people each. This is not surprising, as New Zealanders are highly entrepreneurial and willing to give new business ideas a go. However, many of these entrepreneurs will lack knowledge and experience in business planning, and should turn to an accountant for help. An accountant will provide input on a variety of issues and will express your ideas in meaningful financial terms.
A business plan is both a route-map and a blueprint. You can plan the best possible route to your objective and use milestones to measure your progress. Some people believe that business planning is akin to crystal ball gazing but this is not strictly true. If you can create a proper business plan with the help of a chartered accountant, you will be prepared for any unpleasant surprises or eventualities along the way.
Reaching the milestones that you created will let you know whether or not you are on course, and if not, what corrective action is required and when.
Business plans may be created in various ways depending on the advice of your chartered accountant but the following three elements will need to be addressed:
- Business Objective: This is what you are trying to achieve. Since the purpose of starting a small business is to make money, a business objective should best be defined in financial terms. Common measures of business objectives include return on investment, return on capital employed, return on net worth, growth and so on. Your chartered accountant will help you to devise the appropriate measure.
- Business Strategy: Strategy is one of the most misused terms in business terminology, so be sure to understand it clearly. If the objective is what you are trying to achieve, the strategy is how you are going to achieve it. Clearly, strategy has no meaning without an objective and vice-versa. If you cannot find a strategy to achieve your business objective, there’s a good chance that your objective is over ambitious.
- Business Behaviour: It is important to recognise that businesses behave just like people, and the objective and strategy must be in consonance with the behaviour. For instance, there is little point in forcing aggressive objectives and strategies on a highly conservative business. If you must be aggressive, make sure that the right people with the right attitudes are in place first.
You can see for yourself that a sound business plan is an essential prerequisite for success. Why don’t you get started today by hiring a good firm of accountants?
29.04.2010
by Mark
Gwilliam
Expenses that are deductible for tax for investments in New Zealand property follow the general principle that the expenses should have been incurred in connection with the property. Thus expenses of the following nature would be fully deductible for tax:
- Accountancy fees for the preparation of property accounts,
- Bank charges both for loan applications and administration fees provided they relate to the property
- Small items of routine repair say for less than $5oo
Certain expenses, to be eligible for tax deductions, require some explanation.
Home office expenses: This is the claim for a tax deduction if you are running your property business out of your home. The costs that can be claimed include proportionate amounts of mortgage interest payments, insurance, utilities and so on.
The New Zealand IRD department is unlikely to allow home office expenses in the case of properties that are passively managed. In other words, your property investment needs to be actively managed and to qualify as a business. To qualify, the home office must not include a bed. Apparently, the IRD department have been known to check. Consult a chartered accountant if you have any doubts.
Insurance: Any legitimate expenses in connection with insuring your home and its contents are fully deductible for tax purposes. Many property investors take out home and contents insurance on their income properties because many items are not covered by the replacement cover of a home insurance policy. Banks often stipulate mortgage insurance cover in the case of a high loan to value for income properties. These premiums are also fully deductible.
Legal fees: There are two elements to the fees – mainly fees for property conveyancing and fees for mortgage registration. The IRD will allow the deduction for mortgage registration but considers the conveyancing costs to be a capital cost and therefore not deductible. It is advisable to ask your lawyers to bill separately for the two elements. If no split is readily available, the normal practice is to claim a deduction of 50 percent of the total bill.
Interest costs: This is by far the highest cost that a property investor is likely to incur and therefore requires careful consideration. The cardinal principle is that the borrowing on which interest deductions are being claimed should have been used for the sole purpose of acquiring the income property. If the borrowing for the acquisition of the income property is not properly structured, there can be a considerable loss of tax efficiency. The situation is quite complex and you should consult your chartered accountant before structuring the finances.
Investing in New Zealand property can be a rewarding experience but before you begin to do so, retain the services of a top-notch accountant to handle your tax.
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