An enduring power of attorney (EPA) is a document that gives authority to another to act on your behalf should you be alive but mentally incapacitated. There are two types of EPAs, one gives the attorney power to make decisions
about your property, and the other gives the attorney power to make decisions about your health and welfare. Both EPAs should be created together, but you can choose a different person to be the attorney for each.

EPAs only become active after an assessment by a medical professional results in a person being certified as no longer having the mental capacity to manage their care, welfare and property. The evaluation can be done by a GP but may require a specialist’s opinion. Some EPAs may specify that the assessment is to be done by a neurologist or a geriatrician.

Remember back up people to be EPA’s. Future-proof your document.
What happens if I don’t have legitimately documented EPAs?

If you were to be declared mentally incapable without EPA documents in place, the only option for your family is to apply to the Court for an order allowing them to act on your behalf. This is an expensive, time-consuming and stressful process, all at a time when your family is dealing with the emotional impact of you losing your mental faculties. And at the end of the process, the court may decide to appoint someone else.

Consider the scenario where a person has been deemed incapacitated, but no EPA is in place for their property. Due to this change in circumstances, the person’s spouse must sell the jointly-owned home. But because the spouse doesn’t have the legal right to act on their incapacitated partner’s behalf, the spouse will need to apply to the Court for an order before they can sell the home. It’s a situation no one would wish on their partner.


Do you offer fringe benefits to your employees?

While we understand that Fringe Benefit Tax (FBT) can, at times, be overwhelming, it’s essential to get it right. Below is a brief overview we have put together to ensure that employers meet their FBT requirements to avoid late payment penalties and interest. 20 July 2023 is the due date for the next quarterly FBT return and for those that file FBT returns.


What is fringe benefit tax?

Fringe Benefit Tax (FBT), is a taxable non-cash benefit provided and enjoyed by an employee as a result of their employment relationship that is in addition to wages or salary. As an employer you may be liable for tax (FBT) on certain benefits provided to employees. The most common are:

  • Motor vehicles provided by the business for the employee’s private use
  • Free, subsidized or discounted goods and services
  • Low-interest loans
  • Employer contributions to sickness, accident or death benefit funds, superannuation schemes

When to file your FBT return:

As an employer you are required to file your FBT return either quarterly, annually or by income year. Your choice will depend on the type of company you manage, whether you were an employer in the previous year, the benefits you provide and how much tax you pay.

FBT Calculation Methods:FBT Calculation Methods:

There are three different types of FBT rates: singe rate, short-form alternate rate, and full alternate rate.

If you file an annual return, you can choose any of the three FBT rates and change rates from year-to-year. If you file quarterly, you can swap between FBT rates during the year. However, if you elect and pay FBT using the alternate rate in any of the first three quarters, you must complete the alternate rate calculation process in the fourth and final quarter.

For more in-depth information on how to calculate your fringe tax liability, please refer to the formulas provided by IRD in their FBT guide which can be found by visiting this link:

IRD Recent Updates – 2023 Budget

The Government has announced its Budget for 2023 last month which included three revenue measures:

  • Raising the trustee tax rate from 33% to 39% to align it with the top personal income tax rate for the 2024-25 and later income years effective from 1 April 2024
  • From 1 July 2024, Government will make a three percent Kiwisaver contribution to recipients of Paid Parental Leave who make their own contribution of at least 3%
  • The Budget also reflects an increase in revenue from imposing a tax on some large multinational enterprises operating in New Zealand.

For full details of all Budget announcements, see



Main home is not subject to capital gain tax (‘the main home exclusion’) and government made it clear that a person can have only one main home. However, how to determine which home is the main home if a person has few homes as a residence, or if they are absent from their home for a period? There are rules around this, and they differ depending on when the property was acquired.

Property acquired from 29 March 2018 to 26 March 2021

The main home exclusion will apply if the dwelling on the land was used as the main home for most of the bright-line period. ‘Most’ means more than 50% of the time – and Inland Revenue draws a hard line: if the land was used as a residence for half of the bright-line period or less, the main home exclusion does not apply at all. No adjustments can be made to recognise periods where the dwelling was used as a residence. On the plus side, provided the property was used as a main home for more than 50% of the time, the property will be fully exempt under the main home exclusion regardless of any period spent living elsewhere.

Property acquired on or after 27 March 2021

For the property acquired on or after 27 March 2021 ‘main home days’ are counted. The concept of ‘main home days’ initially seems fitting however, it also includes days when the land has not been used as a main home – if these days do not exceed 12 months. An absence exceeding this 12-month buffer period is a strong indicator that the dwelling is not used by the person as a residence. Although, the exact outcome will be fact dependent. A friend house-sitting while you’re backpacking around Europe is one thing but relocating to London for two year and renting it out is another. If a person relocates and stays in their home while visiting twice a year, this will not constitute a fixed or permanent presence, nor would it be typical use of a residential dwelling. The main home exclusion would not apply.

However, an adjustment is allowed for periods where the dwelling was used as a residence (for land acquired on or after 27 March 2021). To put this in a simple example, if a property was acquired in mid-2021, the taxpayer lived in the property until mid-2022 and left for a 2-year OE to London, returning to the property in mid-2024, if the property was then sold in mid-2026, then the main home exemption could apply for 3 years, but would not apply for 2 years; that is, 40% of any income from the property would be taxable under the bright-line.

If you have two or more residences, which is your main home?

If a person has multiple homes, they ‘use as a residence’, the main home will be the one they have the ‘greatest connection’ with. So, what is ‘greatest connection’ and how to determine this? It is objective and requires an overall assessment of the person’s circumstances. A person may not, based on emotion (or tax purposes), arbitrarily decide which of their properties they have the ‘greatest connection’ with when applying the main home exclusion.

If you have a family home and a holiday home, you don’t need to worry – the test does not apply because the holiday home is not, typically, ‘used as a residence’ in Inland Revenue’s view.

There are several factors considered:

  • the time the person has occupied the home
  • where the person’s immediate family lives
  • where the person’s social ties are strongest
  • where the person’s employment, business interests and economic ties are located
  • where the person’s personal property is located

These factors alone cannot determine whether a property is a main home but indicate which dwelling the person has the most significant or important bond with.

If a person is a New Zealand tax resident, the bright-line test may apply to their overseas properties as well. Therefore, if they spend time overseas and own more than one property, they may also need to consider which homey they have the greatest connection with.



From 13 September 2023, the cost of the Xero Starter, Standard, Premium and Ultimate plans will increase in New Zealand as follows:

  • Starter plans increasing to $33 a month
  • Standard plans increasing to $71 a month
  • Premium plans increasing to $94 a month
  • Ultimate plans increasing to $105 a month

The price of any optional add-ons you have as part of your subscription will not change. All pricing is in NZD and excludes GST. This web page tells you more.

There are no pricing changes to Partner plans (Cashbook and Ledger plans)


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.

So choose your preferred outlet by clicking on one of the buttons below, and don’t forget to follow us!




JULY 28th 2023
  • Your GST return and payment is due for the taxable period ending 30 June
AUGUST 28th 2023
  • Your GST return and payment is due for the taxable period ending 31 July
  • Provisional tax payments are due if you have a March balance date and use the standard, estimation or ratio options
SEPTEMBER 28th 2023
  • Your GST return and payment is due for the taxable period ending 31 August

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.