Paul's Post
18 April 2010

“The bad news is time flies. The good news is you're the pilot” - Michael Althsuler

Tax Year ended 31 March 2010

Now that the tax year has ended for the majority of our taxpayer clients, we have our end of year questionnaires available from our website so you can start putting your records together.

 

Here are some steps to follow:

 

1.     Full completion for each entity will save everyone time.

2.     Remember to go through the checklist provided.

3.     We will not be able to start your work if all the records are not provided to us, so don’t be offended by any resulting delays.

4.     We will not assume that your home office expenses are the same as last year.

5.     Do ask your bank for loan summaries of all business and rental loans.

6.     If you use a personal vehicle for business purposes we will need your mileage details.

7.     Review last year’s depreciation schedule and make a note of any obsolete or sold assets.

8.     You must sign all questionnaires

 

Click on the following link or cut and paste it to your browser

 

 http://www.enoka.co.nz/annual_questionnaires

 

Business Restructures or sale of major assets

Remember if you are selling a major business asset, or changing shareholding in a company this could have significant tax consequences. So please include us in your consultation process.

 

Here is an example:

Bob owns 100% of the shares in a loss attributing qualifying company (LAQC). Bob wishes to sell his shares to Dylan. If Dylan does not file a QC and LAQC election within 63 days of the shareholding change, or such further time as allowed by the Commissioner, the LAQC status is deemed to be revoked on the first day of the income year in which the shareholding change takes place. If the company incurs an overall loss for the year in which LAQC status is deemed to be revoked from the start of the year, Bob's share of that loss will not be attributed to him.

A Client asks….

Frank owns a property and has been renting it out for three years. The property has been depreciated for tax purposes .Can Frank stop claiming depreciation deductions to prevent the accumulated depreciation getting higher and creating a liability for depreciation recovered if the rental use is changed to personal or if the property is sold?

 

Answer:

Frank has no choice but to continue claiming a depreciation deduction. Because depreciation has already been claimed, Frank is unable to elect that the property not be depreciable property. The “use it or lose it” policy means that, even if no depreciation is claimed from now until there is a change of use or a sale, depreciation recovered will still include the unclaimed depreciation. Depreciation recovered is calculated based on the adjusted tax value of an asset. The adjusted tax value is based on depreciation deductions allowed to a taxpayer, irrespective of whether the depreciation has been claimed.

 

Paul Enoka Chartered Accountants Ltd
We see ourselves as an extension of your business. As an integral part of your team, we share the same commitment enthusiasm and desire for success as you do. We have the knowledge and experience to provide effective reliable advice on all taxation matters. We can advise you how to legitimately minimise the cost of taxation and obtain accurate financial reporting and advice to ensure the success of your business.

As we constantly update our knowledge to incorporate the latest changes in tax law and rulings, we can provide you with the latest information and advice on the most tax effective method of achieving your goals. Our services include:

                        ·         Budgeting
                        ·         Payroll
                        ·         Business Purchase and Sale

·         Companies Act Compliance

·         Computerised Accounting Packages

·         Financial Reporting (Annual)

·         Financial Reporting (Periodic)

·         Fringe Benefit Tax (FBT) Management

·         Goods and Services Tax (GST) Management

·         Monthly Cashbook Preparation

·         New Company Incorporations

·         Tax Assessment Review Service

·         Tax Payment Reminder Service

·         Tax Returns (Personal, Companies, Partnerships, & Trusts)

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Although every effort has been made to ensure the accuracy of this newsletter, the information is necessarily generalised. Clients are therefore requested to seek specific advice and not rely solely on the above, if they are interested in any matters mentioned.

 

Paul Enoka Chartered Accountants Ltd

PO Box 31-348 Lower Hutt 5040, New Zealand

Phone (04) 939-7977