The much signaled changes (as discussed in our April 2018 Topical Taxes) to how residential rental properties are taxed were introduced to parliament on 5 December 2018 in the form of the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill. This Bill has passed its first reading with the report on the Bill’s submissions expected by 11 June 2019.
The loss ring fencing rules will, generally, prevent taxpayers from offsetting tax losses from residential rental properties against their other income. This will mean these taxpayers will, generally, pay more tax. If a taxpayer has losses which have not been utilised when they dispose of the property, and the gain on that property is subject to tax, these losses may be able to be offset against that gain.
The rules will apply to residential properties with farms, mixed-use assets and certain employee accommodation excluded from the rules.
It is proposed that these rules will come into place from 1 April 2019 for the 2020 income year.
We will provide a detailed analysis on these changes once the legislation has been finalised.
Other changes of note in this Bill include:
Please give us a call if you wish to discuss any of these topics further.
Copyright McIntyre Dick & Partners Ltd © 2015 / Site Map / Website Design by Back 9 Design