New tax legislation will affect farmers and self-employed

Waimarino Bulletin, Volume 3, Issue 41, 25 March 1986, Page 16

New tax legislation will affect farmers and self-employed

Peach, Cornwall and Partners, chartered accountants of Raetihi have advised the Bulletin to pass on to its readers two urgent tax matters that will affect (1) all farmers and (2) any self-employed person who claims car expenses from 1 April 1986. We quote from their memo. ALL FARMERS On reading the Government White Paper which restructures the standard value, lifestock accounting and taxation systems one point has come to our attention. If you are intending in the foreseeable future to pass on to your children all or part of your lifestock under the'

current provisions which allow this to be done at the ruling standard value of your lifestock then the White Paper advises that it is proposed to terminate this provision as at the 31 March 1986. Note: This date is the 31 March 1986, not your balance date. Accordingly we urge you to contact your accountant urgently to ascertain whether this applies to you and what steps you should take to implement any such transition from you to your family. SELF-EMPLOYED PERSONS Car Running Expenses With the change to the Income Tax Ammendment Act which will be enacted in Parliament prior to 31

March there is a significant new legal requirement relating to the deductability of expenses for use of a car. a) If the vehicle is solely used for business purposes then no specific records are required to be kept. This can only apply where more than one vehicle is owned. N.B. Travelling to and from your place of work is a private purpose. b) If the vehicle has any private component then a log book is required to be kept. It must show the use of the vehicle on a trip by trip basis and the purpose of each trip. c) If no detailed records are kept the maximum deduction permitted is 25% of costs including depreciation. Suitable logbooks are available from most stationers.