Merry Christmas, we hope 2025 was an “OK” year for you.
As we reflect back on the year, there were highs and lows for all of us. Births, weddings and funerals, celebrations mixed with sadness, dramas and medical adventures. As the old joke goes, getting old is not for the faint hearted, but the alternative is worse.
In case you have blinked and missed the last decade, Shellock celebrated its 10th anniversary earlier this year and we’ve moved offices. But enough about us.
On the tax and business front it’s all about staying the course and working through all the tough times. Well done for those who have successfully sold or downsized, upsized, retired or restructured your life (in a good way).
Here are a few tax points to note from the year, the good, the bad and the “that’s interesting”.
- The Supreme Court decision on the Uber case will likely have significant implications for the gig economy, contractors and employers (or as we like to call them non-employers). You can read the case here Rasier Operations BV v E Tū Inc [2025] NZSC 162. With respect, we consider the decision is wrong for a number of reasons. What this will mean short and long term are concerning if you have recently, currently are, or are considering hiring independent contractors to support your business.
- The Labour Party’s proposal on Capital Gains tax… This is a two-part brief analysis. First, a mature conversation about capital gains tax is overdue. Brownie points to Labour for being brave enough to adopt a CGT policy. With respect, we consider the announced policy is wrongly constructed, will be inefficient and won’t deliver what you think. Come on guys, you know if you introduce it the next government are going to keep it (yes, we predict they will). But they will spend a lot of time and money twiddling around the edges. So, Labour, your challenge this summer break is to draft a “part 2” to make it fair, firm and workable. A major change like this a generational one, just like GST was in the 1980’s.
- … and where the new revenue will go. No doubt a think tank thought it was necessary to sweeten the CGT deal by directing the funding to a specific worthy cause. It is mistaken thinking. No Government can bind future Government’s including dictating where tax monies are spent. Priorities and situations change. If insufficient money is raised from this CGT, does that mean the worthy cause is no longer worthy?
- Kiwisaver – well done the Government lifting Kiwisaver contributions. And National Party proposing further increases. Some people are not going to like it, and it might hurt just a bit. But it really is a no brainer for the benefit of individuals and the economy. But, with respect, some finer detail is required legislating employers to not “gross package” salaries or wages, and thus the employee pays the lot. And somehow (no, we don’t have all the answers) make some provision for those not currently in work. Yes, we really do mean the Government needs to contribute for those on disability and unemployment benefits, and parental leave. Kiwisaver is for all of us.
- Charities – not content to scare the charitable houses in February this year, the Minister of Revenue announced in late October taxation of charitable business income will not proceed (at present). But rumour has it, on 14th November a new consultation paper was issued (to a select few, which sadly excludes us) with consultation closing 24 December 2025. This is “targeted consultation” on detailed design for a number of points.
- Taxation for donor-controlled charities if they have not contributed enough money to their charitable purposes, and whether donor-advised funds should be treated in a similar way;
- distributions by private trusts to tax exempt entities;
- membership subscriptions and related matters for taxable not-for-profit organisations (who are not charities); and
- donation tax credit simplifications (which will not be simple and may be capped).
Rumour also has it every employee at the Inland Revenue must be working on Christmas Day through to end of January 2026 (otherwise, why close submissions on Christmas Eve). And Father Christmas will be late in making presents this year as he prepares his submission by the due date. That’s the problem with limited release of information. Rumours abound.
- Deductibility of asbestos removal costs? In a spooky coincidence [?] on 29 October 2025 the Inland Revenue issued (QWBA): PUB00510: “Income tax – Can a deduction be claimed for asbestos removal costs?” for consultation. No mention of asbestos tainted sand… Consultation has just closed; it may need updating. You can find the original consultation document here Income tax – Can a deduction be claimed for asbestos removal costs?
- Gifting of ‘loop cards’ – Father Christmas will also be interested in the gifting of ‘loop cards’. No, we had not heard of it either. In April this year the Inland Revenue concluded that gifts of ‘loop cards’ to employees should be grossed up and subject to PAYE, whereas previously employers were treating them as being subject to FBT (on the face value). In a nod to good sense, the Revenue’s interpretation will be replaced with an amendment to the FBT rules, to reinstate the FBT practice. You can read all about it here Commissioner’s operational position on the FBT treatment of open loop cards provided by employers to employees. ‘Loop cards’ can be “open” or “closed” but both represent a type of card that holds a monetary value that can be redeemed for goods and/or services and typically are provided to the employer by a supplier as part of a rebate system.
- The Annual Tax rates & misc Bill was introduced in August 2025. Submissions have since closed. Of interest to Father Christmas is that certain non-resident visitors who undertake remote work (for overseas employment or business) may not trigger New Zealand tax consequences by introducing a presence of up to 275 days in any 18-month period will not create a tax resident status. On a similar line, if he sells some of his excess power generated back to the grid from his New Zealand holiday home, he will not be taxed on it – assuming he meets the definition of a “natural person” [?] and the generation is from the dwelling not the barn housing the reindeer (not sure if the generation comes from the sleigh). Donations returned by the Big Guy to the donor will be clawed back from their donation tax credit; and the definition amounts for “cash basis persons” have (mainly) been doubled. And if he decides to move permanently to New Zealand there will be a new FIF regime that may help out in the long term. You can find the original 199 page commentary to the bill here Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill commentary. No, we haven’t read it all either. The bill is expected to be passed in March 2026.
- Flu vaccinations – Finally, and fittingly, we note the Inland Revenue issued a QWBA concerning (we kid you not) “ABC Limited designs and manufactures children’s toys. It owns a large factory and warehouse where the toys are manufactured and stored. The company decides to provide its employees with a free flu vaccination in May 2025 for the winter season to reduce illnesses within the workplace.” Now, that’s looking after the Elves, and it is not taxable nor subject to FBT.
Merry Christmas and a safe New Year from the team at Shellock. Remember that Christmas is about giving your presence, not your presents. Long time readers will know that Shellock’s charity of choice is World Vision New Zealand. You may have your own Christmas charity but if not, consider purchasing a Christmas bauble from Farmers this Christmas. All proceeds go to your local hospice where Hope, Love, Care and Kindness can be found. Hospice New Zealand / Te Kahu Pairuri o Aotearoa.
