SMART LOGIC OCTOBER 2009
Walsh & Associates are not your every day Chartered Accountants.  We are business professional with real management experience. That means we don't just know accounting - we know all aspects of business and what it takes to become successful.  How can your business benefit from smart accounting?   Contact us today - first  consultation is FREE!! VAUGHAN WALSH P  06 833 6295  |  027 450 4475 www.walshassociates.co.nz     CALCULATORS & KEY TAX DATES Need a calculator or want to know key tax dates?  Visit our website www.walshassociates.co.nz or click on links below. income tax calculator? mortgage calculator? kiwisaver calculator? GST, FBT & RWT provisional tax PAYE   TROUBLE FREE TAXATION It is very important that all profits derived from a business activity are treated in such a way so as to charge against income the maximum allowable deductions.  We do this by looking at all the issues under the following:  INCOME TAX GST & FBT  TRUSTS TAX DISPUTE PAYE			New Associated Persons Rules   It has been threatening for long enough, but the changes to Associated Persons has finally been passed into law and while the changes generally effect the income year commencing 1 April 2010, it should be remembered that as far as land is concerned, the changes apply from the 6 October 2009.   So what does this mean?   Who you associate with may have more meaning than you thought or indeed wanted to think.   How well do you know him or her?.  In today’s society we live in a modern culture where couples living together through marriage is not necessarily the norm, often in a relationship, couples will not share their inner most secrets particularly of a financial nature (and with the laws regarding Relationship Property who can blame them).   Lets look at the internet dater, who moves in with his/her partner. The partner just happens to have a shareholding in a development company which he/she knows nothing about. Living together, he/she has saved enough money and decides to buy a rental property and set it up in an LAQC structure, with himself/herself as the sole shareholder. Before the law changed, it didn’t matter but now it has changed, if he/she sells that rental property within 10 years of acquisition, any gain he/she makes becomes taxable, the reason being that the companies by virtue of their relationship are associated.   It gets worse……   A new provision has been inserted which taxes gains on land sales, where the land was acquired from an associated person who would have paid tax on that sale, if they had sold it. So imagine yourself as a developer, you elect to keep a section out of the subdivision and build a family home on that section, then after 15 years you decide to sell that property for whatever reason. Ahhh ha!, says the IRD, that sale is taxable and any profit you make will be taxed.   Worse still if you are a builder... say you live with a builder or have a business partnership with a builder and you have a rental property that you have owned for 20 years, if you improve that property in any way (even using a completely independent builder), then you will have to hold that property for a further 10 years because if you don’t, any gain on sale will be taxable. This is because the 10 year rule starts from the completion of any improvements to land by a builder rather than from the date of acquisition.   The new rules are so comprehensive that it is likely the IRD will view any structure to get around them as tax avoidance and you don’t want to go there!!!   INTEREST RATES: Dropping / Flat / Increasing   There has been a recent rise in wholesale funding costs, which is likely to push the increase in housing rates up. The Reserve Bank have tried to inject confidence into business by leaving the official cash rate low until the latter part of 2010, but last week the Reserve Bank of Australia raised their cash rate and it is highly probable that we will have to move as well, probably in the early part of 2010.  I think any advice at the moment would be to float until interest rates start to rise significantly, hopefully that wont happen till mid to late 2011. Service Packages At Walsh & Associates we are committed to bringing you the best possible service. Keeping with this, we are changing the way we deliver accounting services to our valued clients. We will now be offering a variety of bundled accounting service packages to assist you in effectively running your business. In addition to this, we are partnering with Xero, an online accounting system with live integration with your bank; ensuring that your business data is always accessible and up-to-date. The benefits of these changes are numerous, I’ve outlined some below: Understand your business – you receive timely, relevant and understandable information. Grow your business – we provide insight and tools to assist you with your goals. Transparency – you know in advance the services that you will be receiving. Improve your cash flow – you pay the same amount every month, so there are no surprises. Meeting your needs – we provide the services that are right for you, from our wide range of expertise. No surprises – you’ll know how much tax you’ll need to pay We trust that you’ll be excited about this change of service and the benefits it will bring to your business.  We look forward to this new part of our journey together.   Should you have any questions whatsoever, or wish to discuss the service package that suits your business please contact Sarah on 06 833 6295 and we will get you signed up today.   Xero is an online accounting system for small business owners brings business owners together with their accountants to work in real-time. It gives you and us easy access to your bank transactions, invoices, reports, GST – anytime you need it, anywhere in the world.  Xero was designed to make managing your business simpler, save you time, and help keep an eye on your cashflow.   Xero is the accounting system that more and more business owners are adopting for peace of mind, access and accuracy. To sign up to Xero today call Sarah 06 833 6295. This month's key business introduction is... For a no obligation consultation call Diane on P  06 8708090 |  M  021 422598. dianedysart@signature.co.nz |  www.signaturehomes.co.nz Diane Dysart - New Home Consultant for Signature Homes offers a personalised service to help clients achieve building their dream home. Their biggest point of diffence as a building company is Signature Homes unique “Home Completion Guarantee”. It gives clients total peace of mind that their home will be fully completed for the fixed price in their building agreement, in the unfortunate event of a builder going bust. In the current climate it has never been more important. No one likes to think of this ever happening, but we have all heard the horror stories, and this guarantee was introduced to protect clients from ever being put in this stressful situation.