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From the 2018 income year (that is, 1 April 2017 onwards), the safe harbour threshold has been increased! Hooray, I hear you say. It's gone from $50,000 to $60,000. It has also been extended to non-individual taxpayers e.g. companies.
What does this mean? Use of Money Interest (UOMI) will only be payable from terminal tax date* for natural persons and non-individuals where their residual income tax liability is less than $60,000 and the following requirements have been met:
The taxpayer must have:
There are a couple of other points: The requirement that they must not have held an RWT exemption certificate at any time during the year has been removed. Oh, and there is an anti-avoidance rule as well, so that you can't manipulate your incomes to fall within the safe harbour provisions.
* Terminal tax date is either 7th February if you do not have an accountant or tax agent OR 7th April if you have an accountant or tax agent who has an extension of time on your behalf.... more info
# Standard method is last years residual income tax + 5%, OR your residual income from two years ago + 10% (only if you haven't filed last year's return yet)... more info
You might have noticed that things are taking a little longer to process, both at EpsomTax.com and at IRD. We have entered the middle of the year slow-down. What is it? Well, it doesn't mean we are putting our feet up. Far from it! Rather, it is when the bulk of clients have their work with us (no matter how we try to spread things out), so there is an inevitable hump to get through.
Please be assured we are working as fast as possible, and yes, we have taken on extra staff to cope with it! We apologise for the delay!
If you would like to discuss, or have concerns, please contact us
Accounting for your rental residential investment property; general taxation advice.