MYOB AE Tax release notes—2020.0 (New Zealand)

• Rate payable: 8.35%.
• Rate receivable: 0.81%.
• RIT threshold: remains unchanged.

No changes to the:

• family tax credit (FTC) rates:
  • first child: $5,878
  • second child: $4,745
• child tax credit (CTC) rate:
  • $780 per child
• in-work tax credit (IWTC) rates:
  • up to 3 children: $3,770
  • each additional child: $780
• threshold level for abatement at $42,700
• abatement rate at 25%.

We've updated the calculations to include the new:

• Student loan threshold increase from $19,448 to $19,760
• income key points for 2020
• net residential income
• profit on the sale of a property.

The ACC levy remains at 1.39%.

• We've added new keypoints to the IR4 and IR3 tax returns to specifically cater for AIM shareholder tax credits. 

New ring-fencing rules apply to most residential rental properties for the 2019–20 income year. The changes include:

• limits on the amount of deductions you can claim if your residential rental property makes a loss
• limits on the ability to offset excess deductions/rental loss against other income.
• Excess deductions are now generally carried forward and offset against future residential income
• what happens to excess deductions when disposing of residential property
• limits on the amount of interest you can claim for an investment in an entity that rents out residential property.

Carried forward ring-fenced rental income losses will post to Tax Manager.

• Carried forward ring-fenced rental income losses will not post to the Tax Tracking system.
• For more information see pages 53–66 of the IR's September 2019 tax information bulletin which includes 11 examples.

The refundable research and development tax incentive operates as a tax credit and applies to the IR4 Company return.

See Research and development (R&D) on the IR website.

The non-refundable R&D tax incentive operates as a tax credit and applies to all return types except the IR7.

Excess non-refundable R&D tax credits carry forward to the next tax year and pass to Tax Manager. The carried forward amount is not updated to the AE Tax Tracking system.

See Research and development (R&D) on the IR website.

Include:

• all income from land sales that are outside the ring-fencing rules
• taxable sales of the main home or holiday homes taxed under the mixed-use asset rules
• tax losses from disposals of residential property.

Net income from a bright-line sale other than your main home, or a property taxed under the mixed-use assets rules is included under Question 22 - Residential income.

For more detailed information refer to the relevant tax return guide on the IR website or the IR313 Buying and selling residential property guide.

IR no longer support filing insurance premiums paid to an overseas insurer via the IR4 tax return. They've advised filing via myIR instead.

Because of this, we have disabled all fields at KP22 and added a message at the keypoint "Overseas insurance premiums can no longer be filed from an IR4 return. File via myIR".

When the IR processor changed from FIRST to START, the carried forward losses were processed differently. This resulted in IR issuing an incorrect notice of assessment.

We've updated our software to change the way we report carried forward losses via E-File for IR4 and IR9 for the 2020 tax year.

From 1 March 2020, IR will stop accepting payment by cheque. See we're moving on from cheques on the IR website.

We've removed all references to cheques from our master templates.

When printing a 901d letter from the Tax Tracking System, we've removed the remittance advice section from the tax notice layout and added a warning on the screen when printing tax notices.

If you have a client level template you'll need to modify it or delete it and use the master templates instead.

We've updated the following layouts:

• 901DE1 (for Reports > Standard 901d letters)
• Pr901.1 (for Reports > Practice reports > IR901DL).

• Ring-fencing rental income.
• AIM shareholder tax credits.
• Profit/loss on sale property.
• Non-refundable R&D tax incentive credits.
• Refundable R&D tax incentive credits.

The provisional tax threshold has changed from $2,500 to $5,000 for the 2021 tax year onwards.

See provisional tax on the IR website for more information.

In the Tax Tracking System, we've updated the RIT threshold in the rollover templates from 2020 onwards.

If you've already rolled Tax Tracking into 2020, any provisional tax calculated on 2019 RIT that is less than $5000 will be zeroed on first access to Tax Tracking after installing this release.