The Tax Lady is a boutique accountancy business aimed at serving the small business community.
  04 473 4311 | 04 526 4866

 

Some questions that we frequently get asked are:

1. What expenses can I claim for my rental property?

  • Legal fees up to $10,000
  • Rates and Insurance
  • Interest paid on funds borrowed to purchase your property
  • Property Management fees & commission
  • Repairs and maintenance (unless they improve property)
  • Motor vehicle and / or travel expenses to inspect the property
  • Mortgage repayment insurance
  • Accounting fees
  • Depreciation

 

2. Business structure - which one should I use?

Sole Trader

Advantages

  • The simplest and cheapest way to start in business.
  • Any income is taxed at the progressive rates of individual tax

Disadvantages

  • Does not provide limited liability. One is personally liable for the debts of the business. Personal assets can therefore be at risk.
  • Income over $70,000 is subject to a 33% tax rate.

 

Partnership

Advantages

  • More than one business owner - therefore more skills, experience and management expertise available.
  • Low start-up costs companies to Limited Company.
  • Tax is paid at personal rates.

Disadvantages

  • No limited liability. Partners are liable (jointly and severally) for the debts of the partnership. This means that one partner is liable for debts another incurred on behalf of the partnership.
  • Income distributions may be inflexible.
  • No protection for partners assets which may be seized to satisfy partnership debts.
  • Losses are deductible against other income, subject to certain loss offset limits.

 

Limited Company

Advantages

  • Once a company name is incorporated no other company can be registered with the same name.
  • It is a stand-alone entity - separate from the owners.
  • Provides limited liability, although most lending institutions will require personal guarantees.
  • Permits splitting of dividend income to shareholders
  • If the company is a 'qualifying company' dividends will either have imputation credits attached which will reduce or eliminate the individual's tax liability.
  • If the company is also a 'loss attributing qualifying company' tax losses can be attributed to shareholders.

Disadvantages

  • Does not protect directors from personal liability. If a director continued trading when the company was insolvent one can be held to be personally liable for the debts of the company.
  • Costs of establishing and administering are higher.
  • Business losses have to remain in the company unless the company is an LTC.

 

3. When do I have to keep a vehicle logbook?

Sole-traders and partnerships may have to run logbooks if the vehicle they use for business is also used for private running. A logbook is required to be kept for 3 months every 3 years. You start with the kilometres at the start of the 3 month period then record the number km travelled that day and the reason for the trip. At the end of 3 months the total private km divided by the total km travelled during that time will give you the private use percentage eg.

If your situation changes within the 3 year period after that then you will need to do another log book. Companies do not have to do a log book, they are liable for FBT instead. Shareholders are deemed to be employees of the company and are therefore subject to FBT for cars available for private running.

About Us

The Tax Lady was formed in 1996 by Carol Rankin and she ran the business from the billiard room in her Stokes Valley residence.

FIND OUT MORE

Our Services

We offer many services based on our vast knowledge and experience.

FIND OUT MORE

Frequently Asked Questions

Click the link below to view our most frequently asked questions.

FIND OUT MORE