WHAT WILL THE NEW YEAR BRING? Only a little over a week to Christmas and it has definitely snuck up fast. What will also come around quickly after we have all had a nice summer break is 31 March and more importantly 1 April for the tax changes coming.

With an election it is almost inevitable that we will get some tax changes. The question is always what they will be. Before the election, the Labour government had indicated a number of these changes, but they were not passed before the election. National then indicated they would reverse a number of these.

Unfortunately, since elected they have been less clear about what they will actually do. The coalition agreement suggests that they will implement their pre-election promises with only some minor amendments. We understand however that even since this document was publicised there have been some changes. On Wednesday last week the previous governments unpassed tax bill was re-introduced with no changes yet. It is unlikely to stay that way.

So, what can we tell you. Well, we know there will be changes. A number are likely to apply by 1 April 2024. Until we have the bill amended, we can only take an educated speculation but some of the things that we are likely to see are:

  • An increase of the trust tax rate to 39% (Labour introduced but never passed this. National has not explicitly said they would not increase the rate and we understand they plan to do so.)
  • A change to the marginal income tax thresholds. The rates will remain but what income they apply to will change.
  • Re-introducing interest deductions on residential rentals. This is likely to be phased back in with 60% deductible in the 2024/25 tax year, 80% in 2024/25 and returning to 100% from 2025/26.
  • The repeal of the clean car discount (this has passed)
  • It is rumoured that the intention is to now keep the so called ‘App tax” which will see online platforms such as AirBnB and Uber charge GST on behalf of their suppliers.
  • Changes to working for families abatement thresholds.

Some of these (39% trust rate and the “App tax”) will require action. We will keep you informed as these develop. This is likely to be fast as most will need to be implemented prior to 31 March.