Blog

The rules for preparing your accounts will change when we do your 2015 tax return.

The new rules are supplied by the tax department. The main difference between what we do now and what we will be required to do next year is to tell the IRD about “associated person transactions”.

Roughly translated, this means dealings the family, another family company or family trust have with the company. So, if you pay your daughter for sticking stamps on envelopes you’ll need to tell the IRD how much you paid her. The list of disclosures of transactions with associated persons is:

• Interest paid by the company. Mostly shareholders, lend their money interest free to their company, so this won’t affect them.
• Loans made from the company. This mostly arises when the shareholders are living beyond their means and need to borrow from the company instead of the other way around.
• Payments for services received by the company. This includes wages, salaries, management fees etc for each recipient. The name of each person and the amount is sufficient.
• Rentals and leases of land and other assets, which would include use of home.
• Expenses for acquiring intangible property, which would apply, for example, if you charged your company for the use of a patent.

Important

Please make sure you are ready to provide this information when we require it.