FIVE GOOD REASONS TO FORM A FAMILY TRUST
THREE DISADVANTAGES OF SETTING UP A FAMILY TRUST
Get professional advice from the start. We can answer any questions you have about trusts, being a trustee and administering a trust deed.
Planning a summer business trip with a personal holiday tacked on the end? Renting out the bach and unsure what expenses can be claimed? Whatever your situation, we want to make sure you’re getting the expense claim tax break you’re entitled to.
Here’s the lowdown on legal costs for trust admin, travel expenses, mixed-use assets and sponsorship.
FACING A LEGAL BILL FOR YOUR BUSINESS OR TRUST? GOOD NEWS.
Generally speaking, you can deduct any business-related legal expenditure carried out by your company and/or trust if total legal expenses incurred are less than $10,000 in a tax year.
Examples of deductible claims include: expenses relating to protecting trade secrets of the business, opposing the extension of a competitor’s patent, defending an allegation of an infringement of copyright, defending traffic infringements brought against company employees while on company business, and costs for appointing company directors.
TRAVEL EXPENSES – WHAT CAN I CLAIM?
If your business involves hitting the road, you can claim business travel as an expense. The best way to prove the business portion of your travel expenses is to keep a diary of your travels. Hang on to your itinerary, invoices and tickets. Jot down the reasons for the trip, date of the trip, and costs of any car hire, air/bus/taxi fares, accommodation, meals and incidentals, as well as the time spent on business and non-business activities.
Mixing business with pleasure? If your trip contains a private or capital element you can claim a 100% deduction (where the holiday aspect is incidental to the work element) or an apportionment (where there are two purposes for the trip, both truly separate). If the work side of things is just incidental to the holiday, no deduction can be made.
WHEN IS SPONSORSHIP FULLY DEDUCTIBLE?
For sponsorship to be fully deductible, your business must be promoted and any element of private enjoyment must be incidental.
Sponsorship examples that are fully deductible:
Whether you’re thinking of becoming a trustee for your own family trust or someone else’s, it’s important to know your obligations under the current law before accepting the role.
8 things to know before becoming a trustee
From 28 September 2018, standard New Zealand subscriptions will change to $60 a month, while premium pricing becomes $75 a month. This pricing includes one active Xero Expenses user. You’ll pay $5 a month for each additional user who is active that month, for example, they submit an expense claim. All other plans remain the same.
We encourage you to look into the new Xero Expenses. It’s simple to use and should save time, effort and processing costs.
Clients can try it out for free until 28 September 2018 and see for yourself how it makes it simpler to claim expenses and get valuable insights into spending patterns.
Payday filing has been available since April 2018. Instead of filing an employer monthly schedule and deduction form (IR348 & IR345) every month, employers will file employment information every payday in line with their normal payroll cycle. From 1 April 2019 payday filing will become mandatory. Payment dates remain the same.
We’ve recently written to all employers to remind them about this, that it’s time to shift and provided them a link to our website with more information.
A nationwide seminar series will be held from September to November for people who work with payroll and we’ll be sending invitations out early next week. Look out for that email and register early as spaces are limited. You’ll be able to register for seminars at this website link shortly.
If you’ve seen the film The Wolf of Wall Street, you’ll be familiar with the concept of money laundering – an illegal process where ‘dirty money’ received from criminal activities is passed through legitimate businesses and made ‘clean.’
In response to a growing number of laundering incidents in New Zealand, the government has made changes to the law, which now affect accountants and small businesses like yours. As of this month (October 2018), we’re required to put new preventative measures in place to help tackle money laundering and financing of terrorism.
What does this mean for you?
We might need to ask you for more information about your business than what we have in the past, especially if it involves large cash transactions ($10,000* or more in one transaction). You may also be asked for additional information about your identity.
If you’re a real estate agent or your business involves sports and race betting or dealing in high value goods, take note – the anti-money laundering legislation will extend to you from next year. To find out what the changes mean for your business, give us a call.
Johnston Associates has decided to provide more regular information via social media channels – namely Facebook and LinkedIn. We will continue to publish our quarterly newsletter, but you will find more regular and timely information through these channels.
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Disclaimer – While all care has been taken, Johnston Associates Chartered Accountants Ltd and its staff accept no liability for the content of this newsletter; always see your professional advisor before taking any action that you are unsure about.