Those interested should provide input into tax working group’s deliberations

HOW quickly the holidays have passed into almost distant memory, and the new year has taken off like a rocket. Dunedin has certainly had its share of news headlines, although not always of the kind we would like.

Tax doesn’t always feature first on the news, but I do think that 2018 will be a year we will reflect upon as one of significant change on each of the policy, legislative and functional fronts.

The tax working group led by Sir Michael Cullen no doubt worked through the break to hit its 2018 reportingback deadlines as it has a lot to do in a very short timeframe.

Although I am perhaps a little disappointed at the disproportional lack of South Island and rural/regional representation, this group will inevitably have a significant bearing on future tax policy direction, even if it merely confirms what the Government is looking for to match previously intimated policy intent.

Most importantly, there will be opportunities for every one of us to provide input to the working group, and if you have an interest in tax matters I would encourage you to do so.

The Government is also seeking to deliver on its election promise to extend the residential property brightline test to five years, meaning that any gains arising from the sale of a nonprimary home, such as a rental property or crib, will be taxable if the sale happens within five years of acquisition.

The base assumption is that only a speculator would hold property less than five years, notwithstanding that life sometimes happens.

The potential good news is that if the property market goes south, there is a potential underwrite by the taxpayer for any losses arising from a sale within five years, albeit it will need to be carried forward until a future profit is made.

Speaking of going south in a big way, for all of you who bought bitcoin or other cryptocurrency during the boom, and have now crystallised a loss, based on the same logic I covered last year about any gains on such likely being taxable because of the nature of bitcoin (for most investors), these losses may well be tax deductible. It is certainly worth a conversation with your tax adviser.

Finally, the IRD is running more than 250 workshops across New Zealand for business owners and other interested folk pertaining to the upcoming phase 2 changes to the IRD system, now called MyIR.

This is a great initiative to ensure we are all prepared for the changes, and is an opportunity you should take advantage of, if you can.

Most of these online services changes will be accessible from April and should allow many businesses to reduce their compliance costs.

At the same time, they will also discuss the new provisional tax payment basis, the accounting income method (AIM), for those using certain accounting systems in their businesses, assuming turnover is less than $5 million.

Worth listening and learning, but please do talk to your tax adviser to make sure AIM does make sense for your business in terms of its outcomes before you ‘‘sign up’’. It will not work beneficially for every business.