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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

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Tax Finance - an efficient use of capital

Written by Greg Millar on May 11th, 2017.      0 comments

Tax finance - an efficient use of capital

chess strategy-944Taxes are one of life’s few certainties, but that doesn’t mean they’re necessarily the most efficient use of your capital.

It could be that retiring costly debt, investing in new machinery, adding a salesperson or an IT upgrade would provide a better return on your capital.

With tax finance, offered through an IRD-approved tax pooling intermediary, this is possible.

Over the past five years, Tax Traders has driven down tax finance rates to make it an attractive option for companies that can identify better ways to use their capital. Finance rates vary depending on the amount and term, but currently range from 3.79% - 4.75%*

Tax finance allows taxpayers to defer their tax payment for up to 22 months (provided the elected maturity date is within 70 days of their terminal tax date).

Tax finance needs to be put in place prior to the provisional date and the interest payment is required up front. If at maturity the full principal amount is not required the taxpayer only needs to pay the principal amount that they need at the maturity date. If they elect to add on feeGuard® when putting the finance in place they are eligible for a full refund on their finance fees for any portion not required at maturity. Tax finance can also be paid off in instalments.

If you believe you could benefit from tax finance please discuss it with your accountant at Alliotts in Auckland on 09 520 9200.

* Rates accurate as at 09/05/2017.

 

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