PROVISIONAL
TAX AND STUDENT LOAN PAYMENTS DUE 28/8/2015
The first instalment of Provisional Tax and Sudent Loan
interim payments are due on 28/8/2015 for taxpayers who have a March balance
date.
This due date applies to Provisional Taxpayers who use the Standard or
Estimation option to calculate their Provisional Tax payments.
TotalAccounting have recently sent out letters to clients who paid
Provisional Tax in the year ending 31/3/2015, and are therefore likely to be
due to pay Provisional Tax in the year ending 31/3/2016, and who have not as
yet provided their year ending 31/3/2015 financial documentation for
preparation of Financial Statements and assessessment of Income Tax
liability. Those such clients should receive these is the next few days.
USE
OF MONEY INTEREST (UOMI) RATE CHANGE
Effective 8 May 2015 the UOMI rates on underpayments and overpayments of
tax changed.
The new rates are:
- underpayments - 9.21% (up from 8.40%)
- overpayments - 2.63% (up from 1.75%)
Rates are reviewed regularly to make sure they are aligned with market
interest rates.
CHANGES
TO THE KIWISAVER FIRST HOME DEPOSIT SUBSIDY AND WITHDRAWLS
Effective 1 April 2015, Government has changed the rules around KiwiSaver
HomeStart grants and KiwiSaver first home withdrawals.
The key changes are:
- The KiwiSaver first home deposit subsidy has been renamed the
KiwiSaver HomeStart grant.
- KiwiSaver members, if they meet the criteria, will be able to withdraw
their member tax credits (MTC) to help towards the purchase of their
home.
- The introduction of a second HomeStart grant for people wanting to
build their own home or purchase land to build their homes on.
- The house price cap has been increased in certain areas.
For more information see:
FIXING
OR FLOATING YOUR MORTGAGE
When
borrowers, whether for your use home or whether as a property investor, make
this critical financial decision, they normally make one of three choices:
-
take a
floating rate and potentially face higher (or lower) interest costs
-
take a
fixed rate, which may or may not prove better than floating rates during
the fixed term
-
split
the mortgage into two loans, with one loan on a floating rate and the
other on a fixed rate for a specific term
One of the
normal consequences of a fixed rate motgage is that if you break it or if
you pay it off earlier you are liable for early repayment penalties.
Even
profound economists are unable to consistently predict every event that may
significantly influence interest rates. So how do we continually get
the lowest possible interest rate on our mortgage? The short
answer to that is- we can't.
If we do
choose to simply take a long-term low fixed rate, we are exposed to the risk
that when our fixed rate expires, we may face a large rate increase, which
we may not be able to afford.
Many people
opt for a floating rate (when floating rates are low) and sometimes will
incur early repayment penalties to break fixed rates so they can enjoy a
lower floating rate. Their intention is usually to watch interest rate
levels and take a fixed rate if rates start to increase. This reflects a
somewhat short-term to a long-term mortgage commitment. If interest
rates start to increase, for example, and you take a fixed rate, you may
find a few months later that those rates are back down- or worst still,
considerably lower than when you decided to take a fixed rate.
Other people
split their mortagage between fixed and floating in an effort to minimise a
total exposure to the risk of floating and fixed rates both rising.
