The Coalition Government’s Tax Working Group is recommending a broad extension of taxing Capital Gains.
Here is what you need to know:
The Group, chaired by Sir Michael Cullen, has recommended the following:
- Tax the Capital Gain on sale of land, shares, business assets, intangible assets such as intellectual property.
- Tax to be imposed when the asset is sold, and levied at the seller’s marginal tax rate.
- The tax would NOT apply to the family home, and personal assets such as cars, paintings, jewellery, and household appliances.
- A holiday home WOULD be taxed on sale.
- No change to GST and no exemptions for certain types of products, such as food and drink.
- The Capital Gain on shares in companies would be taxed but in some circumstances capital losses would also be able to be offset against other income.
- The Capital Gain on the sale of a business would be taxed, including the goodwill.
- No changes to income tax rates, but a recommendation to raise the income threshold for low and middle income groups.
- Environmental taxes: changes to the emissions trading scheme to be more like a carbon tax.
- Dirty taxes on solid waste to reduce volumes to landfills.
- Taxes on water pollution and water extraction.
- Taxation of fertiliser use. Consider congestion charges to tackle traffic issues.
- The government’s full response, including any planned new taxes, is expected in April.
- The intention is to have legislation passed ahead of next year’s election, but changes won’t come in until 1 July, 2020.
- National would have the opportunity to repeal the legislation if it wins the election.
The above Report and Picture have been published by Indian Newslink under a Special Agreement with www.rnz.co.nz
