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Articles by Matthew Gilligan

To Business Owners and Landlords in Christchurch

AUTHOR: Matthew Gilligan

POSTED: 21 March 2011

Firstly our hearts go out to those in Christchurch who have had to endure the earthquakes and aftershocks of recent times. Many of our staff have family in Christchurch and we have been hearing first hand the events of 22nd February and the flow-on effects from this major earthquake.

We at GRA want to do our bit as well. We are donating to 'Paw Justice' a charity that has organised a pet-food bank to donate essential supplies to the many affected animal shelters in Christchurch.

With Christchurch being the second largest city in New Zealand, we are aware that many of our clients are based in Christchurch, or have investments or business interests in Christchurch. Here at GRA we thought it would be useful if we can assist you with the brief guide below of financial matters that you may want to consider.

If you are a Christchurch resident and you have yet to file your income tax return, we have taken the liberty to inform the IRD that you will be late in filing this return.

Financial Guide To Quake Victims

Filing and Payments to IRD

If your business was damaged in the earthquake, it may be unrealistic to meet your filing and payments to the IRD for all the variety of taxes you may be set up to pay.

In these instances, we can contact the IRD on your behalf and let them know that you have been affected. Doing so will give the IRD the ability to use their discretion and reverse any interest and penalties that may be imposed.

Cashflow will be uncertain during these times and making tax payments may not be an option also. Let us know if this is the case and we can communicate this through to the IRD at the same time.

The IRD will want to know a timeframe for when payment can be made. In these early days following the earthquake, analysing your cashflow may be very difficult and as such a month or two would not be unrealistic. This will give you the breathing space to sort out your affairs.

All outcomes with the IRD will be on a case by case basis, as the IRD has the final discretion on whether to undertake such actions. Communicating with them early is likely to yield the best results.

Provisional Tax

If you are a provisional tax payer and your business is affected by the earthquake then it is likely your profits will suffer. The next provisional tax instalment is 7th May. If you receive a provisional tax advice letter from us during April and you are affected, please contact us and we can discuss options for modifying the amount that may need to be paid.

Cashflow Management and Bank Financing

Managing cashflow through a crisis is an art. If your business or investments have been severely affected, your financiers will want to know the effect on their positions. Engaging in communication with them will be critical to ensure a positive outcome. We can assist you with cashflow forecasting where required. We are also aware that many of the banks are offering repayment holidays for a period of time whilst you get yourself back on your feet.

EQC Payouts/Insurance

Repairs

If you own residential rental property or business assets and the insurance is used to repair these assets, you will be entitled to a deduction for the repair, but you will also include the amount of insurance compensation as income. The end result is that is there is no tax loss or profit from undertaking repairs. If you have excess insurance monies beyond the repairs, this will not be assessable for tax.

Replace/Full Loss

If property or assets have been completely destroyed, any insurance payments will be considered as a deemed sale of that property or asset. The effect is that you may have depreciation recovery on depreciable assets if the amount received exceeds the depreciated book value. Depreciation recovery is income for tax purposes.

Other Insurances

Any business interruption or loss of profit insurance is recognised as income for income tax purposes.

If you would like assistance or you would like to discuss these matters in further detail, please contact us HERE or on 09 522 7955.

Request a Meeting

Matthew Gilligan
Director

09 522-7955

[email protected]

© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

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Hi Salesh, I just wanted to send you an email on behalf of GRA to say how fantastic we have found your company to date. As you know, Ben and I joined GRA a couple of months ago and have just found you so amazingly helpful in getting our new property set up correctly and sorted out. We have what I would consider a rather complicated structure as a result and it’s a fantastic feeling to know that we are getting everything done in the best way possible. We have just had approval to put a minor dwelling on the property which will make a massive difference in terms of cash flow and obviously value, something we would never have even thought of without GRA and which we are very excited about. During the buying process we attended a seminar with Matthew and from the outset thought he was fab. We therein signed up for property school and found this nothing short of fantastic. The content was relevant, up to date and comprehensive, but more importantly it was taught in a way that we could actually understand and really get value out of. I wanted to mention also, that everybody GRA have recommended to us has been just so efficient and absolute masters at what they do. A wonderful network of people that we feel very lucky to now be able to call on. From Kris Pederson and Bryan Rist who put our mortgage together to the insurance guys they then referred us to, I’m super impressed. Within GRA, Ellery has probably turned things around for us faster than I’ve ever known before, something which we appreciated so very much when it came to crunch time. She’s always a pleasure to deal with and again, we’re stoked. We’ve just settled on the property today and are about to go and get the keys. I’m pretty pumped and hence this email is probably rather excitable. So, a massive thank you to you Salesh, the partners for such a fabulous 6 weeks at property school and everyone at GRA for their help. May this be the start of our property empire. Thanks again, - A & B - July 2015

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