19 details to look out for in the capital gains tax proposal
The Taxpayers Union has published a list of 19 things to look for in the CGT proposal due out at 11 am. They are:
- will the capital gains tax apply on death or just on sale of an asset;
- will the tax apply if capital is simply being recycled within the same asset class (selling a smaller farm to purchase a larger farm, for example)?
- will there will be a discounted or lower rate, like in Canada, Australia, the United Kingdom, or the United States?
- will the revenue be offset with tax cuts;
- if so, who will receive them;
- will revenue neutrality be maintained in the medium-to-long term as CGT revenue grows?
- will there be exemption exclusions for large properties (will lifestyle blocks be subject to the tax?);
- will there be a ‘maximum value’ for the family home;
- how much tax will be payable if there is an exemption exclusion?
- will asset owners be required to value their property and businesses;
- if so, will it be at their expense, or will the general taxpayer be required to pay;
- if the general taxpayer is required to pay, what will be the estimated cost of ‘V-Day’
- how much time will taxpayers have to obtain asset valuations;
- if valuations are not obtained, will other ‘default valuations’ be used?
- are there any sectoral exemptions (e.g. racing, fisheries);
- will Maori authorities pay capital gains tax, if so, at what rate;
- how are vehicles, boats, antiques etc. treated?
- at what rate are trusts taxed;
- will they be taxed on accrued or realised gains?