The issues papers were announced in the Government’s 2011 Budget and the options proposed are aimed at “ensuring fairness in the tax system”. They are available at www.taxpolicy.ird.govt.nz
The mixed-use assets proposals are targeted at holiday homes (and other assets, such as yachts, launches and aircraft) that are used both for income-producing and private activities.
The suggested options would limit deductions for private use and periods the assets are unused. The thresholds for full deductibility of expenditure have been set reasonably high.
The herd scheme proposal is in response to perceived unintended use of these rules. The rules are seen as too flexible in allowing switching between livestock valuation methods.
Submissions on both issues papers are due by 30 September. As always, there will be devil in the detail, which KPMG will be working through in the coming weeks.
If you have any questions on the above, please speak to your usual KPMG advisor or contact: