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McLEAN AND CO.
Applying for Instalment Arrangements Online
New Secondary Tax Rates from 1 April 2010
Trustees Obligations for Investing
Currently, income earners can be overtaxed when their redundancy payments push them into a higher tax bracket.
If these payments are taxed at a higher tax rate, without taking into consideration your personal tax rates before and after redundancy, you may be over taxed.
The government has passed legislation to make taxing redundancy payments fairer to people who are pushed into a higher tax bracket when they receive the lump sum payment.
A simple tax rebate (the redundancy tax credit) has been introduced that will apply to redundancy payments paid on or after 1 December 2006.
The redundancy tax credit is generally allowed on a redundancy payment that is:
Some payments do not qualify for the redundancy tax credit. The redundancy tax credit is not allowed for a payment for:
The tax credit is not allowed for a redundancy payment paid, directly or indirectly, by a person who is "associated" or related to you. Payments that may not qualify for the tax credit include redundancy payments paid directly or indirectly by:
NEW SECONDARY TAX RATES FROM 1 APRIL 2010
New secondary tax rates and thresholds from 1 April 2010:
|Income threshold||Rate||Tax code
(no student loan)
(with student loan)
|$0 - $14,000||12.5%||SB||-|
|$14,001 - $48,000||21%||S||S SL|
|$48,001 - $70,000||33%||SH||SH SL|
|$70,001 and over||38%||ST||ST SL|
If any of your employees have more than one job they may want to check their tax code is correct. They can work out if they're on the right code by using out work out your tax code decision tree. If they want to change their tax code they need to complete a Tax code declaration (IR 330) form and give it to you. You'll need to update your Employer monthly schedule (IR 348) with their new tax code and calculate PAYE at the correct rate.
Use our PAYE calculator to calculate your PAYE, go to "Work it out".
APPLYING FOR INSTALMENT PAYMENT ARRANGEMENTS ONLINE
If you think you may have financial difficulty paying your tax IRD now have a new service where you can apply online for an instalment arrangement.
You can find the Instalment arrangement proposal under "Get it done online".
This is what you'll need to do when you apply:
IRD will email you within three working days to say if they have accepted your proposal or if they need more information.
A range of statistics about tax revenue and social entitlements is available on the IRD website.
The statistics include data about customers, revenue collection, donation rebates, Working for Families Tax Credits entitlements, child support, GST turnover and filing, and income distribution by income bands.
They cover the years from July 2001 to June 2008, and customer data is available from April 2001 to March 2008. The figures will be updated every year and the current tables were published on 1 December 2009.
TRUSTEES OBLIGATIONS FOR INVESTING
Trustees must be particularly careful when investing trust assets. They must invest the trust's assets according to the Trust Deed, any statute and general law that is in place and also in accordance with any court order.
Generally a trustee must:
act in the best interests of both present and future beneficiaries
act impartially and fairly
A trustee should also take advice in areas where the trustee does not have any expertise, such as investments. Section 13B Trustee Act 1956 states "A trustee exercising any power of investment shall exercise the care, diligence and skill that a prudent person in business would exercise in managing the affairs of others"
If the trustee has special skills from their profession, employment, or business, a higher duty of care is imposed. Section 13C Trustee Act 1956 states "the trustees in exercising any power of investment, shall exercise the care, diligence and skill that a prudent person engaged in that profession, employment, or business would exercise in managing the affairs of others" These are high standards for trustees to meet.
It is important to note that prudent decisions are measured by how investment decisions are made by the trustees rather than the results of the investment decisions made.
An Investment Strategy should take into account the following:
Objectives for the Trust. What are the trust funds required for? How much is required? Whan are the funds required?
The Risk Profile of the Trust. Unless authorised by the Trust Deed, trustees must not make speculative investments. This does not mean that trustees cannot make investments that may carry a degree of risk, but the degree of risk must be reasonable and in keeping with the trust's objective and risk tolerance
Capital growth and income requirements thatrmeet the needs of the beneficiaries
Liquidity needs for the Trust
Beneficiaries may request access to Trust documentation. The investment strategy will show benedficiaries that the trustees are very clear about their investment obligations.
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