Nexia New Zealand - Capital Gains Tax Review 2019
After months of deliberations, public consultation and an interim report, the Tax Working Group (TWG) last month delivered its final report.
As expected, the TWG has recommended, amongst other things, an (effective) comprehensive capital gains tax. Some critics have described the proposed regime as one of the “harshest” in the world, with many gains potentially being subject to tax at the top marginal rate of 33% with no discounts, concessions or allowance for inflation and very little in the way of exemptions, exceptions and roll-overs.
In many ways, such proposals pave the way for a grateful public when the Government inevitably announces which watered down version of the proposals it will adopt. That is, of course, assuming the “harshness” of the proposals hasn’t put the voting public off the idea of capital gains tax altogether, and importantly that the Government can gain the political support it needs to get any changes it wants to implement across the line.
Whether you are for or against a capital gains tax or sit somewhere in between, it is worth noting that the proposals outlined in the TWG’s final report are at this stage just that – proposals. And while it is helpful to understand what the proposals are, there is little to be done until we know exactly which of those proposals the Government intends to pick up and run with, and then what is likely to make it through the political minefield that will follow.
For our detailed report click here