Welcome to the New Year!

Posted 1 year, 10 months ago by Maggie Waine    0 comments

Happy New Year everyone!  We hope that you had a safe and happy Christmas and New Year and are ready to launch into 2016.

There are a few important changes and updates that are going on in this newsletter, so please take a look through.

COMPANY ANNUAL RETURNS

If you have a Limited liability company which we administer for you, you will be aware that these costs are direct debited from your account as we are invoiced directly from the Ministry of Business, Innovation and Employment.  This year is no different.  Prior to any payment being taken from your account, we will establish the places of birth and birth dates for all Directors of the company, find out if there are any address changes and/or share changes and then file the return for another year.  The cost remains the same at $100 +GST per company.  This covers our cost to obtain the information and draw up current minutes to ensure that your company is compliant as per NZ law.

If you do not wish to pay by direct debit, you are more than welcome to file your annual return through the website of the Companies Office at www.business.govt.nz/companies.  This is only $45 which you pay at the time of completing the return.  You just need to ensure that you have minutes on file for that year.

MATLEY STAFF CHANGES 2016

There are a few staffing changes that will be happening with Matley Financial Services as mentioned last year.  The first major one which will positively impact client service and contact is that we are employing a new Practice Manager.  Currently Maggie has this job description, however she is more involved with the administration side of the business (added to that she will be on maternity leave from the end of May so will be preoccupied elsewhere).  This new staff member that we are taking on has senior accounting experience and will be the key support person to David.  Our new staff member will be starting with Matley in April 2016 and will be taking a leading role in helping to guide the company forward and improve and extend our services that we currently offer to clients.  We will be able to provide more information on our new team addition once they start with us.

Maggie’s new job description will change to Practice Administrator and she will continue with her current work in the administration, payroll and accounts receivable side of things.

RESIDENTIAL LAND WITHHOLDING TAX

- IntelliConnect Tracker November 16, 2015

The introduction of the Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill (93-1) proposes a new tax named residential land withholding tax (RLWT).  The objective of the RLWT is to act as a collection mechanism for the new bright-line test, which would require income tax to be paid on any gains from the disposal of residential land that is acquired and disposed of within two years, subject to some exemptions.

Proposals for the RLWT were consulted on in an officials' issues paper, "Residential land withholding tax", released in August 2015.

It is proposed that RLWT is payable from 1 July 2016, in the same circumstances as bright-line residential land income, except there is no "main home" exemption.  Because the focus of RLWT is on New Zealand residential land sold by offshore persons, a main home exemption is a compliance cost of marginal use.  There will be an exemption for disposals of inherited property, as well as relief for relationship property.

An "offshore person" includes all non-New Zealand Citizens and non-permanent residents.  It also includes a New Zealand citizen who is living overseas if they have been overseas for the last three years.  A holder of a New Zealand residence class visa may be an offshore person if they are outside New Zealand and have not been in New Zealand within the last 12 months.  New Zealand trusts and companies may also be "offshore persons" if there are significant offshore interests in them.

The obligation to pay RLWT will primarily be the vendor's conveyancing agent.  A conveyancing agent provides conveyancing services as defined in the Lawyers and Conveyancers At 2006. If the vendor does not have a conveyancing agent, the obligation to pay RLWT will be on the purchaser's conveyancing agent.  In the absense of either, the obligation to pay RLWT will be on the purchaser themselves.  If the vendor and purchaser are associated persons, the purchaser will be the person who is primarily liable for the payment of RLWT.

The amount of RLWT required to be withheld will be the lower of:

  • 33% (28% if the vendor is a company) x (current purchase price - vendor's acquisition cost), and
  • 10% x the current purchase price

RLWT will be paid before other disbursements are made at the time of settlement.  If the vendor's conveyancing agent is required to pay RLWT, this will be paid after the amount required to discharge the vendor's mortgage obligation with a New Zealand registered bank or non-bank deposit take licensed under the Non-bank Deposit Takers Act 2013.  If this would result in insufficient funds being available to pay RLWT, the amount of RLWT payable will be restricted to the difference between the current purchase price and the amount required to discharge the New Zealand mortgage.

The person required to withhold must pay the required amount to the Commissioner of Inland Revenue.

The proposed RLWT is not a final withholding tax.  The vendor will be able to claim a tax credit for the amount of RLWT withheld and paid to the Commissioner against their final income tax liability in relation to the sale of the residential property.  In some cases, this may result in a tax refund.

 

GOODS AND SERVICES TAX ON CROSS-BORDER SERVICES AND INTANGIBLES

The amendments proposed in the Bill apply GST to cross-border "remote" services and intangibles supplied by offshore suppliers (including e-books, music, videos and software purchased from offshore websites) to New Zealand-resident consumers, by requiring the offshore supplier to register and return GST on these supplies.  The proposed amendments follow proposals outlined in the discussion document, "GST: Cross-border services, intangibles, and goods" released in August 2015.

Currently, GST is not collected on cross-border services and intangibles that are purchased from offshore suppliers.

The amendments are intended to maintain the broad base of New Zealand's GST system and create a level playing field between domestic and offshore suppliers of services and intangibles.

GST is also not collected on low-value imported goods that are below the "de minimis" threshold (typically goods below the value of NZ$400).  The Bill does not impact the collection of GST on these goods.  Instead the measures in the Bill are intended to be the first step in the process of collecting GST on overseas purchases.

Although this is an important issue for New Zealand retailers, the Government is not willing to move unreasonable cost or inconvenience on to consumers.  For this reason, Customs has been asked to work through a number of logistical issues with stakeholders and is expected to release a consultation document in April 2016 that will seek public feedback on the practical implications of options to streamline the collection of duty, including GST, on low-value imported goods.

The main features of the proposals are as follows:

  • Offshore suppliers of services would be required to register and return GST on remote services purchased by New Zealand-resident consumers.
  • To ensure compliance costs are minimised, offshore suppliers will not be required to return GST on supplies to New Zealand GST-registered businesses, nor will they be required to provide tax invoices.
  • Offshore suppliers would be required to register and return GST if their supplies of services to New Zealand residents exceed NZ$60,000 in a 12-month period.
  • A broad definition of "remote" services is proposed, which includes both digital services (such as video, music and software downloads) and more traditional services (such as legal and accounting services received remotely).
  • In some situations, an electronic marketplace may be required to register instead of the principal offshore supplier.

The proposed rules will come into force on 1 October 2016.

The proposed amendments are consistent with the Organisation for Economic Cooperation and Development (OECD) International VAT/GST Guidelines, and broadly follow the rules that apply in other jurisdictions, such as Member States of the European Union, Norway, South Korea, Japan, Switzerland and South Africa.  Australia has announced plans to introduce similar rules that will apply from 1 July 2017.

Source: www.taxpolicy.ird.govt.nz

 

AN INTERESTING CASE ON TRUSTEESHIP

- IntelliConnect Tracker 22 September 2015

Trustees’ failure to act in good faith leads to removal and liability despite exemption clause, 22 September 2015

The recent case of Lee v Torrey [2015] NZHC 2135 considers the obligations of trustees of a discretionary trust. Both of the trustees (one of whom was a beneficiary) of the PD Lee Trust (the Trust) failed to act in good faith and displayed no moral concern to provide for other beneficiaries of the trust which resulted in depletion of the Trust account funds. The exemption clause in the Trust deed did not protect the trustees from liability. The trustees were removed, replaced by the Public Trust and ordered to make good the loss to the Trust.

Background

The Trust was originally settled by the late Ms Pamela Dawn Lee (Ms Lee), who died on 2 June 2007. The first plaintiff (Matthew Lee) is one of two of her sons both of whom lived for a significant period of their lives with their maternal grandmother. The evidence suggests that the deceased’s relationship was not good with her own mother or her other son, Brennan.

The original trustees of the Trust (settled on 16 June 2005), were the deceased herself and the first defendant, Ms Donna Torrey (now Ms Donna Folwell). On 20 June 2005, Ms Lee made her last will and named Ms Folwell together with Dianne Franich as the executors and trustees of the estate. In addition, the will gave Ms Folwell the power to appoint a new trustee or trustees to the PD Lee Trust.

On 16 January 2006, Ms Folwell retired as trustee of the Trust. This was done by way of a deed signed by Ms Folwell, the deceased and the proposed new corporate trustee, PAG Trustee Ltd, whose sole director and shareholder was the deceased’s solicitor. As noted by Faire J:

“Of some significance in this case is that upon Ms Folwell retiring as trustee, the deceased made no change to her will … the will gave Ms Folwell the power to appoint a new trustee or trustees to the PD Lee Trust. The resulting position was that at the time of the deceased’s death, Ms Folwell was not a trustee of the PD Lee Trust (and had not been for approximately 18 months) but had the power to appoint herself and anyone else as a trustee, as well as the power to remove any existing trustees [12].”

Apart from a vehicle and personal chattels, the estate had a value of $43,427.01. On 4 November 2007, Ms Folwell advised that she intended to retire the solicitors’ trustee company as a trustee of the Trust and appoint herself and the second defendant (William Folwell), her husband, as replacement trustees. In proceeding with this, she was exercising a power of appointment given to her under the deceased’s will. In evidence, one of the trustees of the estate, Ms Franich, said that she retired as an executrix and trustee of the estate on 7 December 2007. The balance then standing in the Trust’s bank account was $169,312.35 which by 2 January 2008 had increased to $171,082.28. It was accruing interest of approximately $860 per month.

By March 2008, the balance in the Trust account had been reduced to $533.89 due to a number of distributions the trustees had made to themselves, other beneficiaries and an investment in an Internet scam. In evidence, the defendants admitted that they did not keep accounts or make tax returns for the trust. They also did not keep a record of the distributions they made to themselves or how that money was spent.

In the course of the proceedings, the Trustees acknowledged that they should be replaced, that the investment in the Internet scam was inappropriate and accepted that their performance as trustees was poor (particularly in relation to record keeping and accounts). In their defence they argued that there had been no direction by the settlor as to how they should exercise their discretion in making distributions under the Trust and that they were entitled to an exemption from liability pursuant to the exemption clause in the trust deed.

High Court

The High Court noted that:

“In this case, the deed of trust gives the trustees absolute power of discretion. It identifies three discretionary beneficiaries, and does not provide any guidance on how the trustees should exercise their power of discretion. As established above, the Court must not intervene to direct the trustees how they should exercise their discretion. This of course stems from the fact that a discretionary beneficiary only has a mere expectation but not actual interest in the trust’s property. Any intervention must be limited to an examination of the trustees’ actions. The first plaintiff, as an aggrieved discretionary beneficiary, must show that the trustees did not act honestly or in good faith … [106].”

In light of the above, the High Court examined the defendants distributions from the Trust, namely, the withdrawal of $80,433 for their personal use and the $26,120 of the trust’s money they spent on the Internet scam and concluded that the defendants acted in bad faith in relation to these two major distributions from the trust [108],[110]. Further, the High Court found that the nature of these breaches of trust was the breach by the defendants of the rule against self-dealing [123],[124].

Faire J also held that the trustees could not rely on the liability exclusion provision in the trust deed and said:

“Where the trustees have breached a duty that is fundamental to the concept of trust, they cannot rely on a liability exclusion provision in the trust deed [127] and … it has already been found that the defendants breached their duty to act in good faith. As a result, they cannot rely on cl 16.1 to avoid their liability to the trust. [127],[129].”

The High Court ordered that the defendants make good the loss their actions caused to the Trust, removed them as trustees and replaced them with the Public Trust.

 

XERO PRICING CHANGES

 

Xero Price Changes

 

TAXATION BRIGHT-LINE BILL

- IntelliConnect Tracker, 22 October 2015

Taxation Bright-line Bill reported back, 22 October 2015

On 20 October 2015, the Finance and Expenditure Committee reported back to Parliament on the Taxation (Bright-line Test for Residential Land) Bill (59-2). The Bill was introduced to Parliament on 24 August 2015.

The Bill proposes amendments to the Income Tax Act 2007 and the Tax Administration Act 1994. It introduces a “bright-line” test, requiring income tax to be paid on any gains from the sale of residential land that is bought and sold within two years, with some exceptions. (A bright-line test is a term used in law for a clearly-defined rule or standard, using objective factors, which is designed to produce predictable and consistent results.)

A person’s main home would generally be exempt. There would also be exemptions for inherited property, and for property transferred under a relationship property agreement. Under some circumstances, trusts would qualify for the main home exemption. In relation to the exemption for trusts the Bill as reported from the Finance and Expenditure Committee notes and recommends as follows:

Exemption for trusts

Clause 6 provides that a trustee of a trust could generally use the main home exclusion from the bright-line rule if the property was the main home of a trust beneficiary.

They could not do so in some situations, for example if the principal settlor of the trust (that is, the person who had put the most money into the trust) owned a different main home.

We recommend some amendments in clause 6 (new section CB 16A(1)(b) and (3)) and clause 15(11B) to clarify aspects of this ‘principal settlor’ rule.”

The bright-line test would apply only to residential land. Farmland and business premises would remain subject to existing land sale rules, which make gains from sale taxable in certain circumstances. The bright-line test would supplement the existing “intention” test in s CB 6 of the Income Tax Act 2007, which makes gains from the sale of land taxable if the land was bought with an intention to resell.

The new test will apply to sales of property acquired on or after 1 October 2015.

The Bill is the second in a three-part package of reforms to the rules for taxation of residential land. The reforms are designed to ensure that those who buy residential property with the intention of selling for capital gain, including overseas speculators, pay their fair share of tax.

Royal assent has recently been given to the first part of these reforms: the Land Transfer Amendment Act 2015 and the Tax Administration Amendment Act 2015.

Public consultation has taken place on proposals for a potential third Bill, which would impose a withholding tax on sellers of New Zealand residential property who live overseas (see the officials’ issues paper, “Residential land withholding tax” at www.taxpolicy.ird.govt.nz).

Source: www.taxpolicy.ird.govt.nz 

 

SPCA - FOR A GOOD CAUSE

 

SPCA donations

 

A NOTE FROM OUR CONTACT AT THE INLAND REVENUE REGARDING COMPLIANCE

- 7 December 2015

"We’re continuing to focus on compliance in the construction industry, and I wanted to let you know that some of your clients in the construction industry may soon receive a letter or email from us regarding their obligations to declare all cash jobs in their GST and income tax returns.

 While you may not have any clients in the construction industry it is worth noting that the messages apply to anyone that does jobs for cash.

 You also have an important role to play with helping your clients meet their obligations."

If you have any questions about this, please contact us at the office and we can assist you.


Merry Christmas

Posted 1 year, 11 months ago by Maggie Waine    0 comments


November Update - Last one for 2015!

Posted 2 years ago by Maggie Waine    0 comments

Hello everyone!

I can't believe this is the last newsletter for the 2015 year.  The year seems to have just flashed by in a blink.

This newsletter is a full one with aspects of tax, ACC, health and safety and staff changes to let you know about.

 

FLEXITAX - A NEW WAY TO PAY INCOME TAX

- tax management nz ltd - october 2015 email

As Inland Revenue (IRD) remains at the consultation phase of its Business Transformation project, Tax Management NZ (TMNZ) is a company that we have had dealings with to help clients with tax arrears.  TMNZ has created a new way to pay provisional and terminal tax which delivers greater flexibility to clients.

Flexitax works in conjunction with their Tax PURCHASE product to ease the burden large income tax payments can have on your cashflow.  It allows you to pay for tax purchases from TMNZ in monthly instalments, where you can pay what they can, when you can.

Like a regular Tax PURCHASE, Flexitax eliminates IRD late payment penalties and reduces interest costs for you.

 

ACC - ACTIVE VS PASSIVE INCOME

- The Small Business Institute Ltd Issue 1509

After 41 years ACC has discovered little old widows, who own a rental property, should be paying ACC on the income.  We know one who remarried.  Now, instead of getting up on a chair to change a ligth bulb or picking up her cheque book to pay for the power, the tenant does it.

The test for whether or not income is 'passive' is whether the income derived  by the person is dependent on the person's 'personal exertions'.

There have been a number of cases that have considered the definition of 'personal exertion'.  The judgements of Hadlee v CIR [1989] 2 NZLR 447 and Caverhill v ARCIC (AP93/97) confirm that "personal exertion" is not restricted to "physical exertion".

The interpretation of "personal exertion", adopted by ACC, is intended to cover all possibilities where the income of a self-employed person would cease, but for their continued personal exertion, whether by physical or mental means.  From an 'entitlement' perspective this is important because any form of compensation would be based on earnings not otherwise dervied by a self-employed person.  From a 'collection' perspective the definition is important because the self-employed person would only be liable on earnings otherwise derived.

'Physical exeriton' can be interpreted as the exercise of 'physical effort' by a self-employed person that contributes to, or otherwise maintains, their level of income.  'Mental exertion' on the other hand can be considered to be the 'mental effort' of a self-employed person that contributes to, or otherwise maintains, their level of income.  Eg Day to day decision making in relation to management, administration of a business would generally be caught under the 'mental effort' test of personal exertion.

Personal exertion does not necessarily involve manual or physical labour; exertion by the sweat of the brow.  Input or contribution to a business enterprise may be to management, administration, planning, strategy, structuring, etc, are envisaged by the term. Caverhill v ARCIC.

The exercise of physical or mental effort by a self-employed person that contributes to, or otherwise maintains, their level of income.

a. Has the self-employed person exervised 'physical effort'?

b. Has the self-employed person exercised 'mental effort'?

c. To what extent does the effort of 'a' or 'b' contribute to, or otherwise maintain the self-employed persons level of income?  There should be a clear connection between the effort and income derived by the self- employed person.

d. But for the effort would the income cease?

i. Identify what effort contributes to or maintains the self-employed person's income?

ii. Woudl the income continue in the absence of the effort of the self- employed person?

There is no 'black and white' test to determine if income is the result of personal exertions.  The principles demonstrated by the above cases show that each case must be considered on its merits.  In some circumstances a type of income will be liable and in another circumstance it will not be.

So if a self-employed person declares income from a rental property that is fully managed by a property management company, and the only involvement the self-employed person has with the property is to appoint the property manager, all other activities in relation to the property are carried out by the property manager.  The income from the property would continue even if the self-employed person were incapacitated.

The nature of the income in the scenario above is 'investment' - in other words, other than setting up effort no effort is required by the investor to earn the income.

However, if there is no property mangaer, ACC considers that rental income liable for levies.

If you believe that the income records are incorrect, you should re-file the tax return.  If an individual returns rental income correctly on their return, that income does not attract ACC levies as the rental income box details are not transferred to ACC.  The same applies with partnership income derived from rents, investments or overseas income.  If this income is declared in the partnership income box it will be levied.  If it is declared in the other income box it will not attract levies.

HEALTH AND SAFETY - ARE YOU SCARED?

If not, you should be.

Health and Safety legislation has gone through its final reading and now has been enacted at law and comes into place in April 2016.  The difference between the 1992 Act and the new legislation is over liability.  In effect, liability now rests with the directors and it rests as personal liability not company liability.  Having a limited liability company will no longer offer protection and nor can you insure out of it as any breach of Health and Safety is an illegal activity.

WorkSite Safety have given me an indication at a recent H & S course that they are about training and support rather than prosecution.  However, to ensure that you are fully compliant we would urge clients (particularly those in high risk industries) to engage a H & S advisor to undertake an audit of your business to rectify any deficiencies.

 

MOVING FROM BANKLINK TO XERO - YOU CAN DO IT

If you haven't considered this already, you should.  Conversion from Banklink to Xero is simple and although the cost is more upfront with Xero in comparison with Banklink, it will achieve savings in your annuals through efficiencies in processing with us. So in effect it is just shifting around the “slice” of the pie. 

Another reason that you may want to seriously consider moving to Xero is that Banklink fees appear to be steadily increasing each month.

 

WHAT ARE YOUR BUSINESS GOALS FOR 2016?

Now is the time to sit back over the end of year break to think about where you would like your business to go in the 2016 year.

Whether it be to grow, deal with cash flow, or to take advantage of the turning international economic tide, we can assist you and point you in the right direction.

If you are concerned about cost, we are able to bundle a set of services together under a Fixed Price which is paid in monthly installments.

 

CHANGES IN THE MATLEY TEAM

There are quite a few changes going on in the Matley team (for us!).

Ben now contracts back to our firm in and around his new job in the ANZ Bank.  His hours are reduced and sporadic, so if he used to be your "go to" guy, please email info@matley.co.nz in the first instance as a lot of his workload has been redistributed.  We wish him well in his new vocation and it is unusual not seeing him around the office as he was our very first employee and had been with us for 8.5 years!

To help with the increased workload with Ben's reduced hours we are taking on an interim intern in December.  Judit Dervadelin is a Hungarian student who is currently completing her Masters in Accounting at Waikato University.  She will be with us until the beginning of February.  She will be based in the Hamilton office.

The last bit of team news is that Maggie and David are expecting another baby in May 2016.  This will be a sibling to Heath (4) and Zara (2).

MATLEY'S CLOSING/OPENING DATES

Closed to the public from Monday 14th December 2015.

Reopening to the public on Monday 11th January 2016.

Have a Merry Christmas and Happy New Year.


September Newsletter

Posted 2 years, 2 months ago by Maggie Waine    0 comments

Hi everyone!  Hope that business and life is ticking along nicely and everyone is enjoying the moments of sunshine.  This newsletter covers a range of articles that have come to us by way of the Inland Revenue and CCH Trust.

Happy reading.  As always, if you have any questions about your business or what you read here in the article - please contact us on 0800 628 539.

___________________________________________________________

KIWISAVER HOMESTART APPLICATIONS

From April to July 2015 more than 1,600 people have been successful in securing a KiwiSaver HomeStart grant to purchase their first home, since the new scheme was introduced on 1 April 2015. 

Housing New Zealand receive around 500 applications a week and  are focused on processing them as quickly as possible. 

However, they have found that some of the applications they receive aren't fully completed or don't have the correct documentation attached to them. This can cause further delays, which causes unwanted stress or makes hitting the processing timeframes much harder.

To avoid these delays, here are some points to check before submitting an application:

  • Ensure that the income certificates are for the last 12 months, not the last financial year
  • Ensure that income certificates are provided for all named/intended purchasers
  • Provide a detailed KiwiSaver contribution statement that covers the period your client has contributed to KiwiSaver
  • Provide evidence of a deposit of at least 10% of the purchase price, if there is already a signed agreement for sale and purchase
  • Ensure the correct application has been completed


Remember that Housing New Zealand require a minimum of four weeks/20 working days from receiving an application through to paying out the KiwiSaver HomeStart grant. 

Also, please ensure that if you apply for the grant to meet the financial conditions of your agreement for sale and purchases, you allow at least 10 working days prior to the unconditional date.

_________________________________________________________

INLAND REVENUE CUTS PAPER COSTS

Inland Revenue has recently introduced a new service where correspondence to its customers will be provided electronically in their myIR account as eDocuments. Taxpayers using myIR online can log on and find all their tax related documents easily and in one place. This is intended to make the need for paper and postage redundant.

Inland Revenue spokesperson Davy Udy said “the paper saving project will not only reduce paper but improve and modernise customer communications. Already more than three quarters of a million documents have been made available to customers as eDocuments instead of paper since the service has been introduced.”

Customers will receive an automatic email alert when a new statement or notice is sent to their myIR account. Customers will also be able to search for documents dating back to April 2010, and receive documents faster than by traditional mail.

Customers can use myIR to:

• Access their IRD number

• Keep address and banking details up to date

• Request a tax return

• File a GST return

• Check child support transaction details

• Check student loan transaction details

• Check working for families tax credits

The following can have a myIR account:

• Individuals with a personal IRD number

• Sole traders operating under a personal IRD number

• Business owners

For security reasons, an employee cannot register for an account on behalf of a business.

_________________________________________________________

CONSTRUCTIVE TRUST IN RESPECT OF CONTRIBUTIONS WIFE MADE TO TRUST PROPERTY

Judd v Hawke’s Bay Trustees Company Limited [2014] NZHC 3298 was a property relationship claim based on constructive trust by a former wife in respect of modest contributions to the home property that was owned by trustees of a trust of which the former wife was not a beneficiary.

Background

Ms Judd (the plaintiff) and Mr Hodgkinson were married in November 2005. Both had been married before and brought children to the relationship. The marriage lasted six and a half years and the parties are now divorced. Following the ending of a previous marriage shortly before 2003, Mr Hodgkinson restructured assets and established the Richard Hodgkinson Family Trust (the trust) for the benefit of himself and his children and of which he and Hawke’s Bay Trustee Company Ltd (HBTC) were trustees (the defendants). HBTC was a corporate trustee operated by an accounting firm, in particular a Mr Dine (professional trustee) who had provided professional accounting services to Mr Hodgkinson.

Mr Dine was a relatively hands-on professional trustee, holding the trust cheque book of which he was a co-signatory and who met with Mr Hodgkinson regularly to discuss Mr Hodgkinson’s trusts or business affairs. The trust held amongst other things, the home property in respect of which Ms Judd claimed a 40% interest. Ms Judd made no other claim in respect of the other trust assets. The home property, a lifestyle block, was purchased by the trust in 2003 and then renovated, most of which was complete by the time of the marriage. The property had a value of $820,000 in 2012. Ms Judd brought a contribution to the relationship of $50,000 being the proceeds of sale of her home property, a significant proportion of which was used to meet final renovation work on the property. Mr Hodgkinson made equivalent payments to or for Ms Judd.

High Court

The High Court followed the principles espoused in the Court of Appeal decision in Murrell v Hamilton [2014] NZCA 377. This meant that the decision for the court became whether the professional trustee, Mr Dine, had abjured his trust responsibility to the spouse trustee, Mr Hodgkinson?

The evidence showed that Mr Dine was a far more hands-on professional trustee than was the case for the one in Murrell v Hamilton (above), however, Mr Dine had delegated the trust’s decision making in respect of all matters to do with the maintenance, upkeep and renovations of the home property to Mr Hodgkinson.

The grounds for a constructive trust were found to have been made out, and Mr Dine was found to have abjured certain trustee responsibilities such that both trustees were liable for Ms Judd’s expectations. She was awarded the quantum of $65,000 based on the fact that her contribution was in kind rather than monetary. Ms Judd’s contribution to the property amounted to the sum of $10,000 per year for each year of the marriage [70].

_________________________________________________________

HAPPY BIRTHDAY

Its David's 38th on Thursday :-)

Much loved hard working Daddy, and husband.  There through thick and thin and always on the end of the phone for our clients.

Daddy & Zara (February 2015)
Daddy & Zara (February 2015)
Daddy & Heath (February 2015)
Daddy & Heath (February 2015)

David & Maggie (Sydney April 2015)
David & Maggie (Sydney April 2015)

Happy Birthday David

Everyone having a snooze (May 2015)
Everyone having a snooze (May 2015)


July Update

Posted 2 years, 4 months ago by Maggie Waine    0 comments

Brrrrrr - cold enough for you??
This months newsletter is short and sweet.

COMMUNITY COMPLIANCE TEAM FROM INLAND REVENUE

If you are not already aware, representatives from the Inland Revenue can turn up to your door step whenever and where ever you may be.  The Inland Revenue has a team called the Community Compliance Team.  They visit clients homes to engage with what problems (if any) clients may be having with the IRD.  By law you cannot stop them from visiting you, but you can ask them to cease discussions until a time where your accountant is present if you feel uncomfortable with them.

The Inland Revenue is not trying to be overtly threatening or dominating, they simply are trying to assist clients if they require it.  However, they are tending to ignore the fact that the client has a tax agent (us) who deals with their tax affairs, so if you wish for David to attend at the same time that the IRD Compliance Team has requested to meet with you, please call the office and we will arrange this.

 

 

WESTPAC BANK NUMBERS

What goes around, comes around.  In the case of Westpac bank numbers it would appear this is certainly the case!  Westpac bank are now RECYCLING old bank account numbers to new clients.  

If you had a Westpac account in the past and you have not updated your bank account with the Inland Revenue, make sure the current account numbers are correct.  We are updating the annual and GST bank accounts our end when filing the clients returns.

 

CAPITAL GAIN RATE

While the legislation is not in place yet the new 2 year Capital Gain rate that was announced in the budget will not apply to the family home. 

However, if you are purchasing rentals this may be something that affects you.  If you are concerned, please contact our office to discuss.

 

 

ANOTHER LITTLE REMINDER

We have now almost fully integrated to an email invoice/statement system - which I'm still trying to get my head around at times!  There have been a larger than usual number of clients who are double paying their invoices as they are not aware that they are on direct debit.

ALL Xero charges are paid by direct debit.  So any invoices that you get for these charges you do not need to pay.

Any other invoice that you receive from us is payable within 14 days UNLESS it clearly states in the email that you are on direct debit. OR if you are on a fixed price monthly payment arrangement.

We are also moving to the option of a Fixed Price Compliance engagement whereby you pay a set amount each month therefore negating the large invoice for accounting fees at the end of the year.  A letter will be sent out in the next week or so to those clients whom we feel may be interested in this oayment option.  If you have any queries about this, please let me know.


May Machinations

Posted 2 years, 6 months ago by Maggie Waine    0 comments

Hi everyone!

We hope that you are all well and enjoying the plummet into Winter. Brrrr!!

This month's newsletter doesn't have that much in it unfortunately - April and May are a quiet time in the accounting world.

NEW OPERATING SYSTEM

Matley has now converted from MYOB Accountants Office to Xero.  This has led to a steep learning curve on some things!!

The invoices are one - April was our first batch and.... well.... the descriptions may have been a little bare.  Sorry about that. 

For those of you who received random invoices with no description - no, we aren't just trying to fleece money from you!  Our templates were not set up correctly and descriptions for work were not coming through.

Also, we require email addresses for all clients (if you have one).  This blog is a different system to our accounting system, so if you have an email address that you would rather invoices/statements went too, please can you email info@matley.co.nz so I can ensure that the system is up to date.

 

ANNUAL COMPANY RETURNS

Which leads me to the next slight issue.  For all clients who received a COMPANY ANNUAL RETURN invoice in April - these invoices are either prepaid or under the direct debit system.  Please don't make a manual payment for these as I have set up the direct debit batch and cannot reverse it.   Any payments that are received in addition to the 20 May 2015 batch will be applied as a credit against your future accounting fees.

The line "this invoice is paid by direct debit" was not included on the invoices because of the template issue. (cue Maggie tearing our her now completely grey hair).

April, May, June and July are when we file the Company Returns for Limited companies.  These charges are billed directly to us, so for us to administer your company you need to have a direct debit set up with us.

Legislation is changing on 1 July 2015 because of the Anti Money Laundering Laws.  For me to be able to file your Company Return, I require the birth date, town and country of birth for EVERY director of every company we administer.  This information is kept confidential, but is required to ensure that the Directors are real people.

From 1 July 2015 if I do not have this information, I am unable to file the annual return for your company as the Ministry of Business, Innovation and Employment will not allow me.

So, if you are ever talking to any of our staff members, please give them your birth date and town and country of birth and they will enter it in the system to ensure that we remain compliant with the regulations of the Company's Office.

This is only applicable to those clients who are a Director of a Company.

INFORMATION IN

You are able to send in your information for us to complete your 2015 accounts.  Information that we require to complete the accounts include:

- Bank statements for the period 1 April 2014 to 31 March 2015

- Loan statements for the period 1 April 2014 to 31 March 2015

- Details of any asset purchases

- Hire Purchase documents

- Details of any cheques written

If you are unsure of what else we might require, we have a checklist that we can send you.  Please contact the office if you need this.

 

Finally, some pictures for your pleasure.

Zara is making great progress and is back to terrorising her brother at every opportunity!  

 

Crazy Driver
Crazy Driver

Afternoon Tea
Afternoon Tea


A Personal Message from David and Maggie

Posted 2 years, 7 months ago by Maggie Waine    0 comments

We would just like to say a huge thank you for all the love, support, messages and gifts that have come to us following Zara's accident.

Its been completely overwhelming and unexpected and we count ourselves incredibly lucky to have such lovely people that we are able to work with.

Zara is making a brilliant recovery.  We ended up spending 6 days in hospital, and Maggie and David were able to keep their trip to Sydney to celebrate their 10th wedding anniversary.  

Its been 19 days since the accident and the only way you can really tell anything has happened to her is because she wears a pressure bandage on her arm and appears to blush very easily!

I've included photos of the accident and her amazingly quick recovery.  The last photo of her was taken this weekend just been.

This was the day after surgery

This was still at the hospital

This was the first full day home

This was Easter Sunday

and this was taken this weekend

David and Maggie are now both back at work as Zara is well enough to be in care again.

Thank you again for all your support and gifts - she is swimming in soft toys! :-)


Please Be Patient

Posted 2 years, 7 months ago by Maggie Waine    0 comments

On Thursday Maggie and David's 15 month old daughter Zara accidently pulled a pot of scalding tea onto her face and arm.  She has suffered second degree burns and Maggie is currently with her at Waikato hospital.

As it is the end of the financial year, we are very busy and with this additional stress, there may be delays.  We are trying very hard to avoid this, but your forebearance would be greatly appreciated.

Maggie is uncertain of when she will be returning to work at this stage. Because she is with Zara 24/7 at the hospital, David is primary caregiver to Heath (their 3.5 yr old son).

Thank you.



Shim