If National wins ...

[Vaygor1]

Oh yes, that's certainly right FP.

http://www.nzherald.co.nz/nz/news/ar...ectid=10887756

That article, written well over a year ago, is just another cheap shot to gain readership.

In it, the reporter refers to what is more than likely prudent tax avoidance as "Tax evasion". Big difference but the author makes the leap anyway.

Then about half way down, the article suggests there is no issue here at all. That the companies and trusts concerned pay what would have been paid by the said individuals anyway.

Cunliffe is quoted, chipping in with what we now know to be his usual wow-words "astounded and appalled". I think New Zealand must have stopped listening to him a long time ago. The election result strongly suggests so.

[fungus pudding]

Oh yes, that's certainly right FP.

http://www.nzherald.co.nz/nz/news/ar...ectid=10887756

I was referring specifically to the nonsense you posted about stacking up purchases to avoid tax through ever increasing interest, which you claimed.

[elZorro]

I was referring specifically to the nonsense you posted about stacking up purchases to avoid tax through ever increasing interest, which you claimed.

And I was referring to the fact that dairy farms are larger on average, than they were. Some owners are exiting the industry, and others are buying additional farms. Interest on these purchases, even at 5-6% p.a. of several million dollars, is surely substantial. It's a large overhead for any business.

[fungus pudding]

And I was referring to the fact that dairy farms are larger on average, than they were. Some owners are exiting the industry, and others are buying additional farms. Interest on these purchases, even at 5-6% p.a. of several million dollars, is surely substantial. It's a large overhead for any business.

So it's dairy farms that are getting you hot and bothered. Should dairy farmers not be allowed to expand? Should they not be allowed to sell? Should they not be allowed to pay interest? Should they not be allowed large overheads? What's the problem!

[winner69]

Are farmers still exempt from Road User Charges .....better change the law if so

[elZorro]

So it's dairy farms that are getting you hot and bothered. Should dairy farmers not be allowed to expand? Should they not be allowed to sell? Should they not be allowed to pay interest? Should they not be allowed large overheads? What's the problem!

It was an example. There are many others building up property portfolios with bank loans, also using the interest-defraying-income method. I'm not saying that's everyone, but the primary aim of those people is not to make a high income each year and pay income tax on it. It's to build up a tax-free capital gain situation for the medium-longer term.

The next questions to be raised about that are: are these investors large-scale employers? Do they innovate in the sorts of ways that will bring NZ back up the OECD rankings? Or are they helping to keep NZ relatively poor overall? Where else in the economy could that sort of investment be utilised?

[fungus pudding]

It was an example. There are many others building up property portfolios with bank loans, also using the interest-defraying-income method. I'm not saying that's everyone, but the primary aim of those people is not to make a high income each year and pay income tax on it. It's to build up a tax-free capital gain situation for the medium-longer term.

The next questions to be raised about that are: are these investors large-scale employers? Do they innovate in the sorts of ways that will bring NZ back up the OECD rankings? Or are they helping to keep NZ relatively poor overall? Where else in the economy could that sort of investment be utilised?

To qualify as an expense (deductible) the purpose of borrowing must be to earn taxable income either at time of borrowing or in the foreseeable future. That is rigorously enforced by IRD. There are even cases where IRD has disallowed interest claims on commercial buildings bought for permanent holding simply because the rental review is too far away from purchase. And don't assume that all property result in tax free gains. There is plenty of income tax collected from property sales.

[westerly]

Much is made of Labours CGT proposals but what is quietly ignored is there was to be an expert review before it was implemented. The howls of opposition from those who may have been effected including JK were probably to be expected. Like raising the age of qualifying for Super. CGT will happen.
As for tax avoidance legal or otherwise any tax system must be seen to be fair. A minor example is where FP and any business man ,farmer can claim vehicle expenses related to their business. A wage earner cannot claim the cost of transport to their place of work. Which is a cost of employment. As EZ says you can run a business at a loss and end up with an asset at reduced cost if you have the capital.

westerly

[slimwin]

Thats what happens when you release policy without thought out detail. Labour would climb into National for an un-thought out policy release too. And so they should.

What fool accepts a policy without knowing the actual implications? A blinkered one...

[fungus pudding]

Much is made of Labours CGT proposals but what is quietly ignored is there was to be an expert review before it was implemented. The howls of opposition from those who may have been effected including JK were probably to be expected. Like raising the age of qualifying for Super. CGT will happen.
As for tax avoidance legal or otherwise any tax system must be seen to be fair. A minor example is where FP and any business man ,farmer can claim vehicle expenses related to their business. A wage earner cannot claim the cost of transport to their place of work. Which is a cost of employment. As EZ says you can run a business at a loss and end up with an asset at reduced cost if you have the capital.

westerly

I doubt that many business people are so concerned with such trivia as cheating on their vehicle apportionment. Some will though, and some employees use the bosses vehicles for pvt. running, pinch stationery, and find ways to help themselves to various 'perks'. Business people cannot claim the cost of driving to work, as you claim, unless they meet strict criteria such as using a sign-written vehicle.
http://www.ird.govt.nz/business-inco...s/vehicle-exp/

Note that travel from home to and from work is not a business expense.

And why you think operating any business at a loss is a good idea, or benefits the owner, is beyond me.