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Rental income - new ring-fencing rules

The rules for reporting rental income have changed from the 2019-2020 income year.  This means that you can’t offset losses on your rental properties against other income and new rules apply to deductions claimed for residential properties. Residential property deductions will now be ring-fenced, meaning that they can only be used to offset income from residential property. This means that the residential property deductions you claim for the year cannot exceed the amount of inc...

Enduring Power of Attorney - why you need to put them in place

These documents are often associated with ‘old’ people, who are losing their mental capacity.  And yes, we agree, having Enduring Powers of Attorney in place are very important at that stage of life. However, we recommend that all of our clients put the two Enduring Powers of Attorney in place from the start of their financial planning process, as you never know what might happen. I am working with a specific example right now, a 50 year old very active woman (skier, golfer) had a sever...

Using an adviser adds more than 5% to a client's portfolio

Research recently carried out in New Zealand by Russell Investments, recently confirmed the findings in the USA and Australia, that using an adviser can add 5.2% pa to a clients portfolio returns. There are three areas that advisers make a difference to their clients investment strategy: 1. Rebalancing (0.4% extra return) 2. Getting it Wrong (2.9% extra return) 3. Avoiding Behavioural Mistakes (1.9% extra return) In addition, there was the intangible benefit for making investing simpler, but als...

Online Relationship Break-Up Tool

The Ministry of Justice has released an online collection of information for people navigating a relationship break up.It says while it has had a lot of helpful information on its website, it has been told it could be overwhelming."We took a look at how we were presenting information to people navigating a relationship break up and came up with a more individualised approach."The new tool acts like a funnel. People select the topics that are important to them and can then delve deeper ...

Sole Trader vs Company?  What should I do? (with thanks to Beany)

Our support team at Beany are asked this question frequently so if you've ever wondered.......The short summary is that if you are a Beany client there is very little additional cost and 3 key advantages - read the  blog (I'm a Sole Trader, Should I restructure my business to a Company?) to find out what they are.What happens when the shareholding of your company changes This one catches out a lot of people as shareholdings are often altered in periods of major chan...

Changes to the Trust Law

Over the last 4 (or 17 depending on your source) years new legislation for Trusts has been working it’s way through the consultation and legislative process.It has now been passed into law as the Trusts Act 2019 and it comes into effect on January 30th 2021 and replaces two pieces of existing legislation – the Trustee Act 1956 and the Perpetuities Act 1964.  The goal is to make the trust law more accessible and to clarify and simplify the core trust principles and essential obligations ...

Renting a vehicle and insurance issues

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Permanent or Temporary Loss of your Capital

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More changes for rental property owners and tenants

On 27th August 2019 - more changes were introduced for Landlords and Tenants - but these didn't seem to have as much publicity as the 'warm and healthy homes' changes but are important. These changes were in the Residential Tenancies Amendment Act 2019 and include the following important changes.  The Act now limits tenants’ liability for careless damage in rental properties. gives the Tenancy Tribunal full jurisdiction over cases concerning premises that are unlawful for residential purpos...

Walking the Talk - Moneyworks new Wellness Coach and Mobile Fitness Trainer - Sally Mellor

When we meet with our clients we spend most of our time talking about what has happened in the last year, and how clients are going in terms of reaching their goals.  One of the main goals for our clients is having a financially comfortable retirement. As a consequence, we worked out that we do is - 'Help get you to and through retirement'. While we arrange the financial solutions for people to achieve those goals, we also spend a lot of time discussing health and wellbeing with our clients an...

It wasn't my fault - why do I have to claim? (With thanks to Bridges Insurance)

At Moneyworks, we aren't fire and general insurance specialists, but it is our job to make sure that our clients understand the issues that they have to think about in relation to these types of insurances (car, house, contents etc).  We work with Bridges Insurance Brokers personally, and have referred a number of our clients to work with Bridges.  This is an article from a recent newsletter of Bridges. ...

Understanding New Zealand Superannuation – and noting the pitfalls

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Changes to KiwiSaver Act to enable people with life -shortening congenital condition to access KiwiSaver funds before age 65

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Asia - the powerhouse

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Should you buy those 'extended warranties'?

Over the last 4 years, I have purchased a number of electrical and IT products – Apple Mac’s, iphones, ipads, new hand held vacuum cleaners, a robo vacuum cleaner (that I quickly fell out of love with).  You will be familiar with the sales pitch in the shop or on line – ‘would you like to purchase an extended warranty for that for an extra $59’. ...

‘Junk insurance’s – available at your local bank and retailer

Part of our job in getting you to retirement is making sure that you have the right insurances in place – like income protection, trauma, life, health insurance and checking that your house, contents and other insurances will work for you.  In retirement, often the only insurance cover that you need is your fire and general insurance (house, contents etc), and possibly health insurance if it fits in your budget. For our clients that have opted to meet us each year, we review the relevance of...

ANZ further reduces fees for our clients

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Over 65 year olds can join KiwiSaver

From 1st July 2019 - people aged over 65 can join KiwiSaver and your money isn't locked in.  This means that you can have access to a range of diversified low fee managed funds with flexibility.  Most KiwiSaver funds can be used to pay regular income streams to you (fortnightly, monthly, quarterly), which will help you with your retirement funding planning. ...

What you need to know about the new EQC Changes (thanks to Bridges)

The Facts: EQC – Earthquake Commission is relevant to all New Zealanders irrespective of where we live. It's managed under its own NZ Government Act being the Earthquake Commission (EQC) Act. ...

IRD have more measures to check on home sellers, to make sure that they aren't avoiding the brightline tax test

Although New Zealand doesn't have a capital gains tax, there are a number of measures available for the IRD to tax people who are speculating on property investment. For a number of years,  IRD has actively chased property investors who they can identify are investing for the purpose of capital gain, and levy capital gains tax on them. ...

Why bother having income protection insurance?

When things are going well and we are fit and healthy and well, the last thing that we think of is falling ill.  Most people assume that it is never going to happen to them, and if they do get sick, then it will only be for a very short period of time and they will bounce back and be back at work and life again quickly. Unfortunately, things don't always work out like that.  Moneyworks currently has at least four of our clients on permanent long term income protection insurance claim as they ...

Should you 'go guarantor' to help your children buy into their first home - the Mum & Dad Bank.

This article was generated from a query from a client this month, she is close to retirement and we are working hard to make sure that she will have enough money to have a financially comfortable retirement. But she is concerned that her son and his wife will not be able to get on that property ladder, and heard a snippet on Breakfast, from a commentator suggesting that parents could become a 'Mum & Dad' bank. With entry property prices being so high, and more and more young people being un...

Big Brother and China's 'dystopian credit scores'

In the investment newsletters and presentations that we have read and attended over the last 5 months, the current issues of 'big brother monitoring' in China has been addressed on a regular basis. Basically, China has extended its historic approach to 'watching out' for their people by the use of technology.  An example that was quoted that particularly stuck with me was that if you were jaywalking in China, the camera's would catch you, send you an instant fine to your mobile phone while you...

KiwiSaver Fees are falling

KiwiSaver is big business for fund managers now.  Launched on 1st July 2007 - KiwiSaver is now 12 years old.  The total amount of money invested in KiwiSaver is $54,661,000,000 and in the quarter ended 31/03/2019 the value of funds invested in KiwiSaver increased by $4,453,000,000. ...

Should you have health insurance cover?

Simply, if you can afford it yes.  However, New Zealand does have an excellent Health system - but there are many many things that 'fall through the gaps' that are likely to be covered by a good quality health insurance policy. There is a big difference in the quality of health insurance policies - at Moneyworks we recommend that you have a health insurance policy that will pay for non-Pharmac listed drugs.  We have an extended-family member who had various cancers, and was in a fortunate pos...