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LAWCOMM 403 long notes.docx
LAWCOMM_403_long_notes.docx
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LAWCOMM 403 long notes.docx-CONTENTS Tips ...........
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
LAWCOMM 403 long notes.docx-CONTENT...
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
Page 45
Credit is given for PAYE as tax will have been automacally withheld – you set this
off against the calculated tax liability
The balance is your income tax liability
foreign tax credits
These are tax credits for foreign income tax
If you get double taxed (e.g. you are resident in New Zealand, but own a house in Australia
and get rental income from it; you pay tax in New Zealand due to the residence principle and
pay tax in Australia due to the source principle), you get a tax credit – you subtract the tax
you paid overseas from the tax you will pay in New Zealand
If the tax paid overseas is greater than the tax you are supposed to pay in New Zealand, then
your New Zealand tax liability is eliminated on that part of your income only (i.e. you cannot
set off the excess credit against liability for New Zealand tax on your other sources of
income; you also don’t get a tax return)
credits relang to social welfare
Examples:
family scheme tax credits (Working for Families tax credits)
low income tax credits
tax credits for children
housekeeping tax credits
SUBPART BD – BASIC RULES ON INCOME, DEDUCTIONS AND TIMING
BD 1
Income, exempt income, excluded income, non-residents’ foreign-sources income, and assessable income
(1)
An amount is
income
of a person if it is their income under a provision in Part C (Income).
(2)
An amount of income is
exempt income
if it is exempt under subpart CW or CZ.
Subpart CW provides for various categories of exempt income, for example:
o
income of official non-resident entertainers and sportspersons: s CW 20;
o
income of non-resident crew of vising pleasure craſt: s CW 21.
Subpart CZ contains various terminang provisions
(3)
An amount of income is
excluded income
if:
(a)
it is excluded under subpart CX or CZ; and
(b)
it is not non-residents’ foreign-sourced income.
Subpart CX provides for various classes of “excluded income”, including most importantly:
o
GST;
o
fringe benefits;
o
employer’s superannuaon contribuons; and
o
Kiwisaver tax credits.
(4)
An amount of income of a person is
non-residents’ foreign-sourced income
if:
(a)
the amount is a foreign sourced amount; and
(b)
the person is a non-resident when it is derived.
(5)
Income is
assessable income
unless it is:
(a)
their exempt income; or
(b)
their excluded income; or
(c)
their non-residents’ foreign-sourced income.
Definion of deducons (
secon BD 2
)
o
“An amount is a deducon of a person if they are allowed a deducon for the amount under Part D
(Deducons).”
BD 3
Allocaon of income to parcular income years
(1)
All income must be allocated to an income year under this secon.
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