Articles by Anthony Strevens
Back in October 2019, John Rowe wrote an article about the Automatic Exchange of Information (AEOI) whereby tax authorities in many international jurisdictions are sharing information regarding their nationals who are living abroad. In other words, if you have investments or income overseas, and especially if you file tax returns overseas, the chances are that IRD already knows or will know soon.
So why is that a problem? What business is it of the New Zealand IRD if you have offshore interests?
The reason is that if you are a tax resident of New Zealand, then you have to declare your worldwide income in New Zealand. This means that even if your overseas income never comes to New Zealand, or even if it is re-invested or if your investments don’t pay dividends or cash returns, they may still be subject to taxation in New Zealand.
In recent months I have seen a surge in letters from the IRD to clients. These letters state that IRD are aware of assets held overseas, and encourage clients to consider their tax positions over recent years and whether they might like to make a voluntary disclosure in regard to the overseas assets. Making a voluntary disclosure is beneficial, as it means the IRD will not apply some of the more punitive penalties that are within their power to levy on unsuspecting taxpayers. But it has to be done before a notice of audit is issued.
The moral of this story is that you are better to be safe than sorry, and the first step is to contact your Client Services Manager at GRA to discuss what you hold overseas and whether there is a requirement to disclose this in your New Zealand tax return. It’s better to talk to us first before you get a knock on the door from the IRD.
If you are not already a client of GRA, we would be very happy to meet with you to discuss your situation. You can contact us by phoning +64 9 522 7955, emailing us on [email protected] or by filling out our online form.
Hi Matthew, my name is Mark Soster and I would just like to congratulate you on your wonderful book Property 101. A few weeks ago I had a "financial awakening" and began devouring all the books I could find on the subject, however I keep coming back to yours. After 3 reissues from the library I think it easier now just to buy it. Wonderfully simple yet complex enough to require multiple reads and note taking. It has taken a lot of the fear away with regards to property investment but also tempered me with caution. Without it I would probably have stupidly invested anywhere but Auckland, telling myself it’s too expensive, I now appreciate why would you invest anywhere else? The numbers never lie, in a 20 year plan then Auckland is King for capital gain. As a fan of maths (the only perfect thing on earth?) I can see how each opportunity can be ruthlessly examined on a purely financial level. Anyway, thanks again, I will definitely be contacting your company with regards to coaching and expertise. - Mark Soster - October 2017
If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.
Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.