Most of you have a 31 March balance date, so the end of tax year is almost upon us. We suggest that you begin planning for the tax year end now, to ensure that you maximise deductions and do not forfeit tax credits.

Please consider the following issues in light of the current economic situation:

1. Bad debts - the debt must be bad AND actually written off by or on balance date. For irrecoverable interest-bearing loans, it may be possible to obtain a deduction for interest accrued and returned as income in an earlier tax year;
2. Review inter-company charges to ensure correct GST treatment and that proper documentation is in place;
3. Imputation credit account (ICA) issues - effectively two ICAs are maintained until all 33% imputation credits are used
   up. You need to ensure that neither is in debit as at 31 March irrespective of your balance date, to avoid a penalty;
4. Review shareholder continuity for ICA purposes. A minimum shareholder continuity of 66% at all times is required to
   maintain imputation credits;
5. Review shareholder continuity for loss carried forward purposes.  A minimum shareholder continuity of 49% at all times is required to carry forward losses;
6. Fixed assets - if assets are no longer used it may be possible to write off the unamortised balance; and
7. The need to deduct resident withholding tax (RWT) on dividends paid where imputation credits are attached at the 30% rate.  The RWT is payable by the 20th of the month after the dividend.

For more information or assistance contact Mark Davies on 545 6879 or to email click here