acc levies tax deducible?

[beno]

For the investors out there who are billed ACC levies because they make a profit, can you tell me if the levies are tax deducible? I am billed about $500 / year for not being a passive investor. Apparently if you use a property manager you don't need to pay ACC.

Thanks

[Rosco]

Yes deductible.

Ross

[beno]

Thanks Rosco

[artemis]

On a similar topic - every year I wonder why the IR10 Expenses section includes 'Insurance but exclude ACC levies'. Would that be because it is not considered to be insurance? It seems odd to have to include it under Other Expenses.

(I know, I need to get out more!)

[Wayne]

Yes deductible.

Ross

But ACC paid for PAYE isn't deductible?
Wouldn't the ACC levy on profit be effectively on wages?

[Nice]

I suspect using a PM doesn't change anything; unless that change means you no longer make a profit ?

[Perry]

As far as I'm aware ACC levies are not
in any way based on profit or loss. It's
usually based on vocation type risk.

[Wayne]

quite confused now.
OP implied (said) they had to pay ACC levy on profit
Rosco said that this was deductible.

[Perry]

ACC levies are based on occupational hazards.
Or at least that's the way they used to be.
Depending on occupation: (skydiving instructor
versus clerical worker) the cents-in-the-dollar
ACC levy rate relates to the occupation. The
actual levy amount per employee is that cents-
in-the-dollar figure multiplied by the total
dollars-paid-in-wages/salary.

Or something very similar to that.

An investor will have some sort of occupational
status. If the investor makes a taxable profit,
my guess is that profit is treated as if it were
self-employed wages and levied accordingly.

[Wayne]

I know all that.
So the last bit

If the investor makes a taxable profit,
my guess is that profit is treated as if it were
self-employed wages and levied accordingly.

How is that then deductible?

[Perry]

I presume that any ACC levy is a cost of
doing business and is therefore deductible,
In this case, said levy being based on the
PI's profit.

Probably like you and many other PIs,
I use an accountant, but try to pick up
relevant information as and when I can,
from here & there and the accountant.

[Wayne]

The OP asked
For the investors out there who are billed ACC levies because they make a profit
The business doesn't need to pay ACC so it must be the investor who is paying.
This must be because they made a profit as income.
Just the same as I pay ACC levy on my income with PAYE - I can't claim a deduction so why would the investor?
Still confused.
Rosco?

[Rosco]

http://www.acc.co.nz/for-business/tax-agents-accountants-and-advisors/resources/BUS00105#P2_113

It does depend on how the profit is allocated, and I presume from the first post that the rentals were in personal name.

Ross

[Perry]

The OP asked
For the investors out there who are billed ACC levies because they make a profit
The business doesn't need to pay ACC so it must be the investor who is paying.
This must be because they made a profit as income.
Just the same as I pay ACC levy on my income with PAYE - I can't claim a deduction so why would the investor?
Still confused.

Yeah - I see what you mean.
Businesses pay ACC levies on employees wages.
I suspect that a shareholder salary is the same,
or is treated as the same for ACC levy purposes.

[Wayne]

Thanks Rosco.
Yes Perry - I think the difference is that a business can deduct the levies they pay.
So if you are self employed you can do the same.
Seems fair!