Partnership Tax Changed Proposed
September 9, 2008 New Zealand Taxation
The law regarding the passing away of one of the partners in a husband-wife partnership could soon be changed according to Revenue Minister Peter Dunne, in a statement made on September 9th.
Under current law, a two-person partnership consisting of a married couple or a defacto relationship is automatically dissolved in the event of death. This can lead to a tax liability on the surviving partner from the assets of the deceased partner.
The proposed change would allow the surviving partner to defer tax liability of the other partner, to allow the business to continue and not add extra stress on the family. According to Mila Kruger of Abaconda Management, this will be of great consequence for New Zealand’s numerous husband and wife run farm partnerships.
Peter Dunne stated that this change would come into effect at the earliest possible opportunity, although it is not expected to be legislated before the upcoming elections.