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  • IRD Letter

    Hello team,

    The letter was sent to me today - supposedly its from the IRD.

    Attributed to – Inland Revenue


    Looking at property transactions is part of our job. As the number of properties bought and sold has increased in recent years, we have noticed that some people haven’t declared the income from their sales. As a result, we’re now looking more closely at the property sector to make sure everyone pays the right amount of tax.

    We conservatively estimate the loss of revenue from undeclared property income at approximately $100 million a year – revenue that should benefit the New Zealand community.

    While it’s clear some people may be genuinely unaware of their tax obligations when buying and selling property, some are deliberately choosing not to pay tax. Please note that property means both land (including a bare section) and buildings.

    The main thing we look at is your intention when the property was purchased. If you bought it with the firm intention of selling it when prices rise – in other words to make a gain from the increase in its value - the profit is likely to be taxable.

    However, if you bought the property o provide a family home, any profit from the eventual resale will most likely not be taxable.

    It usually comes down to the intention behind the purchase. A good test is to ask yourself “What were my reasons for buying this property?”

    To work out the intention behind a property purchase we listen to what you say and look at your actions. For example, we may look at your history in buying and selling properties, or we might look at statements you made to a bank manager or advisor.

    Everyone's circumstances are different and we consider all the facts on a case-by-case basis.

    We are looking closely at property transactions over the last five years or so and have already identified some of the common errors people make.

    If you think you should have paid tax on the sale of a property but didn’t, you can make a voluntary disclosure. Penalties on the unpaid tax are significantly reduced for people who come forward before we contact them.

    The best advice for anyone with concerns is to either talk to us or to their tax advisor.
    Cheers

    Marc
    Free business resources - www.BusinessBlogsHub.com

  • #2
    LOL - who is going to respond with "Please come audit me"???
    You can find me at: Energise Web Design

    Comment


    • #3
      I have seen this exact text somewhere else recently.

      Comment


      • #4
        Originally posted by SuperDad View Post
        I have seen this exact text somewhere else recently.
        Same here Superdad.
        Not sure where yet though???

        Comment


        • #5
          I just read that article in the WPIA Newsletter today - i think it may have been in the latest NZ property mag also.

          Comment


          • #6
            Marc
            Was the letter an official one mailed to you from the IRD?

            Comment


            • #7
              Originally posted by whitt View Post
              Marc
              Was the letter an official one mailed to you from the IRD?
              Hello Whitt,

              No it was sent by a real estate agent.

              Cheers

              Marc
              Free business resources - www.BusinessBlogsHub.com

              Comment


              • #8
                I must have read it in the WPIA newsletter.

                I didn't get one mailed to me. I can't be active enough

                Paul.

                Comment


                • #9
                  Originally posted by Marc View Post
                  Hello Whitt,

                  No it was sent by a real estate agent.

                  Cheers

                  Marc
                  I assumed it was not an official IRD info. The statements are too open.

                  Comment


                  • #10
                    Agreed, if you were going to be the subject of an audit this is not the type of "friendly neighbourhood IRD" letter that you would get.

                    Comment


                    • #11
                      Originally posted by whitt View Post
                      I assumed it was not an official IRD info. The statements are too open.
                      Gerrofff!

                      The IRD loves open statements that favour themselves.
                      Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                      Comment


                      • #12
                        Marc, Surely a letter like that from your real estate agent can't be good for his / her business must be a good agent to look out for you like that

                        Comment


                        • #13
                          Originally posted by shanenz View Post
                          Marc, Surely a letter like that from your real estate agent can't be good for his / her business must be a good agent to look out for you like that
                          Hello Shanenz,

                          We get quite a few documents and other bits of info coming through from around the world.

                          Maybe the IRD can comment? They visit us so hopefully they will see this thread.

                          Cheers

                          marc
                          Free business resources - www.BusinessBlogsHub.com

                          Comment


                          • #14
                            Whether or not this letter is official is, to me, of secondary importance.

                            The main area of concern as I see it is that this letter could quite easily be one from IRD. If it is not this particular letter then a very similar official one could be sent out next week or next month.

                            I say this because the message this letter contains is pretty clear and obvious and many people will be in trouble if they are auditted. This is what would worry me, not if the letter was genuine or not.

                            xris

                            Comment


                            • #15
                              The IRD is sending it to real estate agents to use in client newsletters. I also think it is too wide open - and wonder if it is the function of agents to be passing on this advice.
                              Last edited by leapy; 15-02-2008, 10:39 AM.

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