IRD Shining a Light on Bright-line Grey Areas

Bright-line Grey Areas

If you’ve seen the news from IRD recently, they’ve been focussing on and highlighting issues with compliance around the bright-line.

If you aren’t sure what the bright-line is, check out our “Everything property investors need to know about the bright-line” article here.

In their recent press-release, IRD have provided some metrics as to the scale of potential non-compliance. With as many as 67% of people incorrectly reporting their income in some way, knowingly or in most cases not.

IRD have acknowledged that a large propotion of the potential non-compliance is simply due to confusion around submitting returns and how to record bright-line income.

IRD have reported that they will improve their processes around bright-line by

  • Informing people of their obligations with our materials and advertising
  • Getting in touch with people when they sell properties that appear to be subject to the bright-line tests
  • Making the process easier – for example creating a box for property related income on tax returns
  • Improving the targeting of our investigations through continually refining our data analysis
  • Pursuing through audits and prosecutions those who refuse to meet their obligations.

They have also suggested that they will be placing additional emphasis on investigating compliance in this area and that they have a full picture of house sales to work with.

We think this is all the more reason why you should seek advice from an accountant (like us) before you even think about purchasing a property to ensure you have the right structure to support your long term plans.

 

About Kiwitax – Award winning business improvement, tax and accounting service

Here’s the thing. As a businessrental property owner or start-up, you get a kick out of having your own gig. But chances are dealing with your tax and accounting leaves you cold. Good news! We love it, so hand it over to Kiwitax and we’ll look after it all for you.

Whether you deal with us online, by phone or drop into our Napier office, you’ll find a friendly, professional hardworking team ready to work with you, however you keep track of your financial information and from wherever you do business. And all for a fixed price. It takes just two minutes to get a quote.

Plus if you’re at a loss to know how to improve aspects of your business – from growth planning to cashflow management, even tax debt and so much more – we’re all over that too. Our Business Improvement advisors can help you make a plan and put it into action.

Kiwitax are a preferred training provider for Business Improvement services through the Regional Business Partner Network Capability Voucher Scheme. This is a government funded scheme designed to boost business capability by providing funding of up to 50% of approved training programs with specified training providers up to a maximum value of $5000.

If you liked this article and want to make improvements in your business, with quarterly coaching sessions specifically tailored to support you to identify and achieve your business goals, lets chat!

Facebook
Twitter
LinkedIn