What did the Tax Working Group say?

Capital Gains Tax and your property

As the political football of a capital gains tax continues to be thrown around, we thought we would take a step back and have a look at what the Tax Working Group actually recommended. Obviously any change to taxes which may affect a huge numbers of kiwis will face some opposition on it's way to becoming law, but below is a summary of the major takeaways the Tax Working Group has suggested for New Zealand.

• Tax the capital gain on sale of land, shares, business assets, intangible assets such as intellectual property when the asset is sold. 
• The tax would NOT apply to the family home, and most personal assets. However, a holiday home WOULD be taxed.
• The capital gain on shares in companies would be taxed but some capital losses may be used to be offset against other income.
• The capital gain on the sale of a business would be taxed.
• Exemptions from capital gains to be granted for some "life events" such as relationship breakup or death.
• No changes to the income tax rates, but a recommendation to raise the income threshold for low and middle income groups.
• No change to GST.
• Changes to the emissions trading scheme to be more like a carbon tax - ie pollution is tax, while carbon reducing activities are rewarded.
• No changes to current taxation of Maori assets and companies.
• Review taxation of charities (ie making sure funds are being used for charitable purposes).
• Extra resources for Inland Revenue for administration and enforcement.