TAXATION CHANGES

Press, Volume XCVII, Issue 28660, 9 August 1958, Page 14

TAXATION CHANGES

Adjustment Of Exemptions

(New Zealand Press Association) WELLINGTON, August 8. In the tax legislation introduced in the House of Representatives today by the Minister of Finance (Mr Nordmeyer) the main changes in the present general income tax law are:

The personal exemption of £375 is reduced to £338 for the income year ended March 31, 1959. and to £3OO for a full year as from April 1, 1959. For persons over 65, the exemption of £420 is reduced to £383 for the 1959 income year and to £345 for subsequent income years.

The wife allowance* of £125 is increased to £162 for the 1959 income year, and to £2OO for subsequent years, thus preserving the combined exemption of £5OO for a married taxpayer. The full housekeeper exemption is similarly to be increased successively from £125 to £162 and to £2OO.

An added exemption of £75 to compensate for the adjustment in the personal allowance for widows and widowers with dependent children will be granted in cases here hardship would otherwise occur. In the aggregation of incomes of husband and wife, where both derive income exbeeding £520, an amendment provides that each will be separately liable for his, or her, proportion of the aggregate tax. This is to facilitate P.A.Y.E. procedure. The existing law is relaxed to permit a deduction for tax purposes of genuine payments passing between a taxpayer and his wife and incurred in production of assessable income, but the consent of the Commissioner of Inland Revenue to such arrangements must be obtained. Farm Depreciation Effect is given to the Budget announcement that initial dedepreciation for farm equipment and employee accommodation for all taxpayers will be witiTdrawn.

Co-operative milk marketing companies are to be subject to the same special basis of assessment as co-operative dairy companies. Encouragement is given to New Zealand companies to provide capital for subsidiary companies engaged in oil exploration and amounts written off loans will, in general, be deductible for tax purposes by the holding company. The Commissioner of Inland Revenue is given power to apportion the proceeds of sales of land with standing timber, between the land and the timber. This is for the purpose of assessing with tax the portion applicable to the timber. It is not ‘to apply to sales of standing timber used for farming purposes.