SEPTEMBER/ OCTOBER 2012
again to the McLean
and Co. Newsletter
in which we discuss current taxation and business matters. We trust
you find it informative.
are happy to accept new clients. We would be happy to assist colleagues
and acquaintances as new clients.
Rate of Vehicles Increased
Upcoming Changes to Student Loans
Are you Eligible to Withdraw your KiwiSaver
Savings from 1 July 2012?
Intestacy- What Happens when there isnt a Will?
MILEAGE RATE OF MOTOR VEHICLES
The motor vehicle mileage rate has been reviewed to reflect the
average cost of running a motor vehicle, including the average fuel prices.
The mileage rate for the 2012 income year has increased to 77 cents per
kilometre for both petrol and diesel fuel vehicles.
The mileage rate is set retrospectively for persons required to file a
return for business income, so that the rate reflects the average motor
vehicle operating costs for an income year. Those persons who meet the
criteria have a choice of using the Commissioner’s mileage rate or actual
costs. Taxpayers who choose to use actual costs must keep records to support
any expenditure claimed.
UPCOMING CHANGES TO STUDENT LOANS
Two major changes to the student loans scheme will take place next
- The student loan repayment rate goes up from 10 cents to 12 cents
in every dollar earned over the repayment threshold of $367 a week or
$19,084 a year. This comes into effect on 1 April 2013.
- Borrowers who are taking out a new loan or who are going overseas
will have to provide Inland Revenue with an alternative contact
person’s details from 1 January 2013.
ARE YOU ELIGIBLE TO WITHDRAW YOUR
KIWISAVER SAVINGS FROM 1 JULY 2012?
KiwiSaver reached its five-year anniversary on 1 July
2012 and you may now be eligible to withdraw your savings.
You may withdraw from KiwiSaver if you are 65
years or older and have been in KiwiSaver for at least 5 years.
For example, if you joined KiwiSaver aged 63 you are
not eligible to withdraw until you have been in it for five years,
that is, when you turn 68.
INTESTACY- WHAT HAPPENS WHERE THERE
ISN'T A WILL
What is Intestacy?
This is where a person dies without a will. The term also covers where a
person makes a will that’s invalid.
If a person dies intestate, their estate is distributed to relatives
according to special rules in the Administration Act 1969. In some cases
there may be a partial intestacy – this is where a will doesn’t dispose
of all the will-maker’s property or assets.
Who sorts things out when someone dies
If a person dies without a will, the High Court appoints an
to manage the deceased person’s estate. Usually a family member applies to
be appointed the Administrator. The formal name for the Court order
appointing the Administrator is “letters of administration”.
The Administrator performs the same duties as an executor. If the
estate is small it may not be necessary for a person to be appointed
What happens to a person’s property if they die
If someone dies without a will, their property is distributed according
to a set of rules in the Administration Act 1969 that set out an order of
priority in which relatives receive the deceased person’s property. Who
gets what depends on which family members exist.
The basic order of priority is:
- the spouse, civil union partner or de facto partner (the de facto
relationship must have lasted at least three years, although it can be
shorter in some cases, such as where the couple had a child)
- brothers and sisters
- uncles and aunts.
The rules of intestacy are in section 77 of the Administration Act 1969,
which you can read at http://www.legislation.govt.nz
Examples of how property is distributed under the laws of intestacy
- Spouse / partner and children – if there’s a spouse, civil union
partner, or de facto partner, and also children:
- the spouse or partner takes all the personal chattels, a set amount
of $155,000, and one third of the rest, and
- the children take the other two thirds.
- No spouse / partner – if there is no spouse, civil union partner, or
de facto partner, the deceased’s children take everything in equal
- No spouse / partner or children – if there is no spouse, civil union
partner, or de facto partner, and no children, the deceased’s parents
- No spouse / partner, children or parents – if there is no spouse,
civil union partner or de facto partner, and no children or parents, the
deceased’s brothers and sisters take everything in equal shares.
- Separation order – if there’s a current separation order from the
Family Court, the surviving spouse or civil union partner isn’t
entitled to any property under the laws of intestacy. If the couple were
living apart but there was no separation order, the rules are the same
as if they’d been living together.
What if there are no close relatives?
If a person dies without any of the close relatives listed above, their
property may pass to the Government.
Can a person challenge the distribution of an intestate estate?
Yes. People have the same rights to challenge the distribution of the
property of someone who died without a will as they have to challenge
distribution under a will.
- Relationship property – the surviving spouse or partner can claim
their share of the relationship property under the Property
(Relationships) Act 1976, rather than taking what they’re entitled to
under the laws of intestacy.
- Family Protection Act – family members can claim against the
deceased’s estate under the Family Protection Act 1955 if they can
show that the deceased had a moral duty to provide for them and that
they won’t be adequately provided for under the rules of intestacy.
- “Testamentary promises” – you can claim against the estate under
Reform (Testamentary Promises) Act 1949 if the deceased breached a
promise to provide for you in a will, in return for work or services
that you provided them.
Small estates: no Administrator necessary
If the estate is a small one, the assets may be able to be gathered in
and distributed without the courts appointing an Administrator. Banks,
company directors and so on can transfer or pay the following to the
appropriate family members without an Administrator having to be appointed:
- money in bank accounts up to $15,000
- shares worth up to $15,000
- life insurance policies up to $15,000
- government stock up to $15,000 and local authority stock up to
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