Yesterday (9 September 2020) Labour announced a new tax rate of 39% on personal income exceeding $180,000 per annum. Key points that we know so far:
• Applies to individuals only, i.e. an individual on a salary of, say, $200,000 will pay an additional $1,200 per annum
• It does not apply to combined household income, i.e. a couple each earning $100,000 for a total of $200,000 per annum will not pay any more tax
• All other rates and brackets remain the same
• Any new taxes or further income tax increases ruled out for their next term (if elected).
• Applicable from next year
• No changes proposed to trust (33%) or company (28%) tax rates
The last point is significant, emphasising the importance of getting the right business / investment structure in place. There will be tax planning opportunities arising out of the differential between the trust and company rates and the new highest rate. It would not surprise me if Labour revisits their position on the trust tax rate at least, but that is how things stand at present.
If you would like a review of your tax position and structure, please phone us on +64 9 522 7955.
I thoroughly enjoyed the Property Leaders event on Sunday, and I really appreciated all the effort that GRA went to for it to happen! I'm really happy with our decision to have moved our business over to GRA - and I was excited to see some of the new services that are being offered to investors, so well done! - Kritzo Venter, May 2019
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