Possible new tax law

[harm_less]

What is obvious from that discussion is that the average New Zealander very much thinks in an 'us and them' basis in terms of taxation. As any company owner knows their business is an entity separate from themselves which is taxed in its own right. If your company's trading year has been profitable it is then beneficial to transfer those profits to the entity that will be taxed least on them. If say one of the business's partners/directors has income from another source such as wages or salary then the amount that is to be allocated to that person should be limited so as to prevent raising that person's annual income into higher tax bracket. The inverse applies for a director that derives their income solely from that business.

Another method for minimising tax burden is to reduce company profits by purchase of major assets which in turn can contribute to business costs (losses) over time as those assets depreciate. That is the reason that many companies and also sole traders replace their vehicles just prior to the end of the financial year.

The same principal applies for simple family owned companies (such as the 'family farm') it does for as for large corporations.

The use of trusts, particularly in respect to family related assets, is also primarily to reduce tax burdens for those accumulating those asset bases and the use of trusts is widespread among far more than just the wealthy. The eligibility for superannuation and aged care contributions can be significantly improved if the person's financial worth has been siphoned off into a trust.

The adoption of a CGT would be one of the fairest and most simply exacted of any wealth tax. It would capture properties owned by individuals and trusts which otherwise are commonly treated as non-taxable investments. It would also bring these into line with business owned properties which are already taxed within company taxation structures.

Except Ardern has ruled out a CGT while she is PM. Mind you wouldn't be the first lie she has told.   Publicly it started with the ultimate lie - I have never lied as a politician.

None of what you described is illegal.  The government set the rules around companies and trusts so of course people use those rules.  Are you saying you don't let your accountant assist you in maximizing your businesses profits in similar ways?

BTW super is not impacted by your assets or secondary income from investments.

The PM's stance on CGT is a difficulty but implementing a similar taxation regime by another title would solve that and is more likely than not IMO.

Nowhere did I claim that any of what I described was illegal. My point was that the practice of minimising one's tax burden is not just the territory of the 'big boys' so any change that affects big business needs to ensure it doesn't disadvantage small businesses.

And so far as income earned in addition to superannuation is concerned the tax reckoning occurs at the end of the year when total income is tallied up, benefits and all, so a portion of that superannuation can often be paid back as a result. Aged care eligibility is asset tested with the limit being $239,930. Anyone involved in rest home care situations are all too aware that some well heeled elderly avoid this threshold by way of their assets having been migrated into trusts. This also serves to disquise their investment income with tax advantages in regard to their benefit security.

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as I understand the the government's intention at the moment is to collect more data, for more informed decision making down the track...

Can't see anything wrong with that, although I could see how those that are having data collected about themselves might be a bit anxious,  if they had something to hide...

So Parker got his $5 mil last year and in that time he has written a speech about unfairness in the tax system.  Money well spent there.

Did you pull that number out of thin air? Proof please.