Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Dunne: views sought on taxing land-related lease payments

Hon Peter Dunne
Minister of Revenue

24 April 2013

Dunne: views sought on taxing land-related lease payments

Revenue Minister Peter Dunne has welcomed the release today of a tax policy officials’ issues paper exploring options to reform the rules around land-related lease payments such as lease transfer payments and ‘key money’ payments.

The paper, The taxation of land-related lease payments suggests rationalising the current rules by introducing generic income, deduction and timing rules for all land-related lease payments.

“Rationalising the rules would help overcome current uncertainties where provisions in the Income Tax Act could result in similar payments being treated differently, giving inconsistent results for taxpayers,” Mr Dunne said.

The suggested changes would follow the lease inducement and lease surrender payment reforms introduced in the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill, which is currently before Parliament, he said.

Under the new proposals, payments for leases or licences of land for a term of less than 50 years would be treated as deductible to the payer and taxable to the recipient.

A separate timing rule is also proposed, to spread the income and deductions over the term of the land right. This would give more cohesion to the rules and give greater certainty to taxpayers over how the rules should apply, Mr Dunne said.

The proposals would change the tax treatment of some lease payments from the status quo.

“For example, lease transfer payments that are generally made by incoming tenants to existing tenants for the transfer of a lease, and which are currently non-taxable to commercial tenants, would become taxable under the suggested changes,” Mr Dunne said.

“This is because the current non-taxable nature of lease transfer payments, together with the proposed taxation of lease surrender payments introduced in the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Bill could distort the commercial decisions of existing tenants.

“Left unchanged, there would be a tax advantage for a commercial tenant to receive a non-taxable lease transfer payment over a taxable lease surrender payment, which is clearly unfair,” he said.

Payments derived by tenants of residential premises are excluded from the proposals.

Other changes under the proposals include making lease modification payments tax deductible that are currently non-deductible to commercial tenants. Also, payments for a permanent easement that are currently taxable would become non-taxable to the landowner.

The timing rules for income from key money would also be rationalised and spread over the term of the lease rather than six years as it is currently.

Together the changes would bring about “a more consistent and coherent tax treatment of land-related lease payments and make it easier for businesses to apply the rules,” Mr Dunne said.

The issues paper, The taxation of land-related lease payments is available on Inland Revenue’s tax policy website, www.taxpolicy.ird.govt.nz. Submissions close on 4 June.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

More Evidence - Scoop Press Conference Recordings:
PM's Post-Cab Presser 8/8/11
"at that point [Tucker] told me he'd release it ..."

Hager Revelations: Inquiry Into NZSIS Release Of Goff Docs

The Inspector-General of Intelligence and Security (IGIS), Cheryl Gwyn, announced she would be instituting an inquiry concerning allegations that the New Zealand Security Intelligence Service (NZSIS) might have released official information to Mr Cameron Slater, regarding briefings provided to the then Leader of the Opposition, for political purposes...

“I am satisfied there is a sufficient public interest justifying the commencement of an own-motion inquiry into the substance of the issues raised with my Office,” said Ms Gwyn. More>>

Goff: Director’s Letter Contradicts Key’s Claims

At yesterday’s media standup, when asked on the topic John Key said ‘I wasn’t told’...
“In a letter dated November 2011 former SIS director Warren Tucker states three times that ‘in accordance with the usual practice of keeping the minister informed’ the Prime Minister had been told. More>>


 

Parliament Today:

Schools, PPTA Sign Up: Primary Teachers And Principals Vote Down Govt Plan

Teachers and principals have voted overwhelmingly against the Government’s controversial “Investing in Educational Success” policy, including proposed highly-paid principal and teacher roles. More>>

ALSO:

Gordon Campbell: On The Usual Round Of Mud Slinging And Name-Calling

This week gave an interesting example of how hard it is to untangle the reality from the slanging matches. The issue that emerged early this week could hardly be more important. Does the government intend to cut spending in health, education and on the environment if re-elected, or not? More>>

Earlier:

Electionresults.co.nz: National and NZ First Rise in Roy Morgan Poll

National has bounced back in the latest Roy Morgan Poll but the big winner has been New Zealand First who rise to their highest level of support since September 2013. More>>

ALSO:

Fish Pun Warning: By Hoki! It’s Labour’s Fisheries Policy

A Labour Government will protect the iconic Kiwi tradition of fishing by improving access to the coast, protecting the rights of recreational fishers and reviewing snapper restrictions, Labour’s Fisheries spokesperson Damien O’Connor says. More>>

ALSO:

It's Official: Governor General Gives Direction To Conduct Election

The Governor General has signed the writ directing the Electoral Commission to conduct the General Election on 20 September 2014. This is the formal authority to run the 2014 election, and enables candidate nominations to open tomorrow Thursday 21 August 2014. More>>

Gordon Campbell: No More Mr Nice Guy

When future historians seek to identify the exact moment when the prime ministerial career of John Key hit the downward slope, they may well point to Key’s interview yesterday with Guyon Espiner on RNZ’s Morning Report. More>>

ALSO:

Dirty (Politics) Weekend: Collins’ Admission Reason For Key To Act

"Despite claiming that the evidence about her in Nicky Hager's book was ‘false’ Judith Collins has now been forced to admit that she did send information about a Ministerial Services staff member to Cameron Slater for him to use in a baseless smear campaign. More>>

ALSO:

Potential Disasters: Underground Coal Fire On Denniston Plateau

Forest & Bird says one or more coal fires have broken out beneath the Denniston Plateau, and that the Department of Conservation (DOC) must stop Bathurst Resources’ preparatory mining work going on there until the fire or fires are extinguished. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news