-
Business valuations
We offer expert valuation advice in transactions, regulatory and administrative matters, and matters subject to dispute – valuing businesses, shares and intangible assets in a wide range of industries.
-
Capital markets
You need corporate finance specialists experienced in international capital markets on your side if you’re buying or selling financial securities.
-
Complex and international services
Our experience of multi-jurisdictional insolvencies coupled with our international reputation allows us to deliver the best possible outcome for all stakeholders.
-
Corporate insolvency
Our corporate investigation and recovery teams can help you manage insolvency situations and facilitate the best outcome.
-
Debt advisory
An optimal funding structure for your organisation presents unprecedented opportunities, but achieving this can be difficult without a trusted advisor.
-
Expert witness
Our expert witnesses analyse, interpret, summarise and present complex financial and business-related issues which are understandable and properly supported.
-
Financial models
A sound financial model will help you understand the impact of your decisions before you make them. Talk to us about our user-friendly models.
-
Forensic and investigation services
We provide investigative accounting and litigation support services for commercial, matrimonial, criminal, business valuation and insurance disputes.
-
Independent business review
Is your business viable? Will it remain viable in the future? A thorough independent business review can help your organisation answer these fundamental questions.
-
IT forensics
Effective ESI analysis is integral to the success of your business. Our IT forensics experts have the technical expertise to identify, preserve and interrogate electronic data.
-
Mergers and acquisitions
Grant Thornton provides strategic and execution support for mergers, acquisitions, sales and fundraising.
-
Raising finance
Raising finance - funders value partners who can deliver a robust financial model, a sound business strategy and rigorous planning. We can guide you through the challenges that these transactions can pose and help you build a foundation for long term success once the deal is done.
-
Relationship property services
Grant Thornton offers high quality independent advice on the many financial issues associated with relationship property from considering an individual financial issue to all aspects of a complex settlement.
-
Restructuring and turnaround
Grant Thornton’s restructuring and turnaround service capabilities include cash flow, liquidity management and forecasting; crisis and interim management; financial advisory services to companies and parties in transition and distress
-
Transaction advisory
Our depth of market knowledge will steer you through the transaction process. Grant Thornton’s dynamic teams offer range of financial, commercial and operational expertise.
-
Corporate tax
Grant Thornton can identify tax issues, risks and opportunities in your organisation and implement strategies to improve your bottom line.
-
Employment tax
Grant Thornton’s advisers can help you with PAYE (payroll tax), Kiwisaver, fringe benefits tax (FBT), student loans, global mobility services, international tax
-
Global mobility services
Our team can help expatriates and their employers deal with tax and employment matters both in New Zealand and overseas. With the correct planning advice, employee allowances and benefits may be structured to avoid double taxation and achieve tax savings.
-
GST
GST has the potential to become a minefield and can be expensive when it goes wrong. Our technical knowledge can help you minimise the negative impact of GST
-
International tax
International tax rules are undergoing their biggest change in a generation. Tax authorities around the world are increasingly vigilant, especially when it comes to global operations.
-
Research and Development
R&D tax incentives are often underused and misunderstood – is your business maximising opportunities for making claims?
-
Tax compliance
Our advisers help clients manage the critical issue of compliance across accountancy regulations, corporation law and tax. We also offer business and wealth advisory services, which means we can provide a seamless and tax-effective offering to our clients.
-
Transfer pricing
Tax authorities are demanding transparency in international arrangements. We businesses comply with regulations and use transfer pricing as a strategic planning tool.
-
Audit methodology
Our five step audit methodology offers a high quality service wherever you are in the world and includes planning, risk assessment, testing internal controls, substantive testing, and concluding and reporting
-
Audit technology
We apply our audit methodology with an integrated set of software tools known as the Voyager suite. Our technology has been developed to produce quality audits that are effective and efficient.
-
Financial reporting advisory
Our financial reporting advisers have the expertise to help you deal with the constantly evolving regulatory environment.
-
Business architecture
Our business architects help businesses with disruptive conditions, business expansion and competitive challenges; the deployment of your strategy is critical to success.
-
Cloud services
Our team is led by cloud business experts who tailor services to the needs of your organisation, from strategy and implementation to ongoing services assurance.
-
Internal audit
Our internal audits deliver independent assurance over key controls within your riskiest processes, proving what works and what doesn’t and recommending improvements.
-
IT advisory
Our hands on product experience, extensive functional knowledge and industry insights help clients solve complex IT and technology issues
-
IT privacy and security
IT privacy and security should support your business strategy. Our pragmatic approach focuses on reducing cyber security risks specific to your organisation
-
Organisational & cultural change
The key to sustainable and future growth is a unified organisation operating within a strong cultural context, where transparency and communication are the priority for Kaimahi, and where visible leadership means walking the talk – but where does that journey begin?
-
Payroll assurance
Our specialist payroll assurance team can conduct a review of your payroll system configuration and processes, and then help you and your team to implement any necessary recalculations.
-
PCI DSS
Our information security specialists are approved Qualified Security Assessors (QSAs) that have been qualified by the PCI Security Standards Council to independently assess merchants and service providers.
-
Process improvement
As your organisation grows in size and complexity, processes that were once enabling often become cumbersome and inefficient. To maintain growth, your business must remain flexible, agile and profitable
-
Procurement/supply chain
Procurement and supply chain inputs will often dominate your balance sheet and constantly evolve for organisations to remain competitive and meet changing customer requirements
-
Project assurance
Major programmes and projects expose you to significant financial and reputational risk throughout their life cycle. Don’t let these risks become a reality.
-
Risk management
We understand that growing companies need to establish robust internal controls, and use information technology to effectively mitigate risk.
-
Robotic process automation (RPA)
RPA is emerging as the most sophisticated form of automation used to help businesses become more agile and remain competitive in the face of today’s ongoing digital disruption.
An increasing number of property investors are steering away from the traditional landlord model and favouring short term accommodation in the ‘sharing economy’.
The returns certainly appear more attractive than your standard residential tenancy arrangement, but I have recently seen a number of situations which have created significant unintended complications from an unlikely source…GST.
But I thought GST didn’t affect residential property?
Correct. But the moment you start to use the property less like a residential dwelling, and more like a serviced apartment, motel or other types of short term accommodation, the problems can start to compound. GST does of course apply to the provision of accommodation in ‘commercial dwellings’ and if the income generated from this activity exceeds the registration threshold (currently $60k), then you have no choice but to register for GST.
Consider a property owner that owns two three-bedroom central city apartments. Current annual residential rental income for both properties is $62k. However, the decision was made to increase this return by renting them on a short term basis – now the annual income from these properties is $93k. The increased gross revenue is a superb result, but as the GST threshold has been breached, the owner has an obligation to register and account for GST. What does this mean for them?
- GST must be returned on all income generated. On $93k that is approximately $12k.
- GST can be recovered on all costs incurred (those that are subject to GST)
- There may be the ability to recover GST on the purchase price of the property (if purchased from an unrelated person). This claim will be based on the original cost and staged over a period of time (usually about two years) depending on specific circumstances
- Any subsequent sale of the property will be subject to GST (think of it as a 15% capital gains tax)
- Ongoing GST compliance responsibilities
- There is also the recent introduction of the ‘bed tax’ in Auckland which can be up to $6,771 per annum depending on the location of the property and the number of nights it is let out. There is no tax for the first 28 nights, and then:
There is of course then the commission payable to Airbnb not to mention the ongoing management of the properties, cleaning, laundry etc and whether you will pay someone to do this for you or opt for the self-manage option.
Even if the rental income from the short term accommodation falls below $60k, there are still instances where GST can be problematic and create unintended consequences. A recent situation I came across involved a person purchasing a beach house in their family trust. To assist with ongoing costs they periodically rented out the bach through Bookabach for about 30 nights of the year @ $400 per night. The complication with this particular situation was that the family trust was already GST registered as they owned a separate commercial property, meaning that the bach rental activity was inadvertently pulled into the GST net.
As the bach would be a ‘mixed use asset’ it is subject to periodic adjustments for GST purposes based on how the property was actually used. For example, say the bach cost $1,150,000 and was rented out for 30 nights, used personally for 30 nights and remains unused for the balance of the year. This would allow 50% of the GST component to be recovered – in this case $75k, a nice cash injection for sure.
However in the next year, the bach is only rented for 10 nights but used personally for 50 nights. This means that over this two year period, the bach has been used to generate income for 40 of the 120 nights that it has been used – this equates to 33%. As 50% of the GST has already been claimed, 17% must be repaid ($25,005). These adjustments are required annually and can swing wildly depending on actual use which in turn can create significant cash consequences for the owner.
When the bach is sold in the future, the full sale price will also be subject to GST after adjusting for GST claims previously made. Alternatively, if the rental activity stops this will also trigger a GST repayment event that would create further cashflow pressures.
This all equates to increased compliance, potential wild cashflow swings and the heightened possibility of taking incorrect tax positions.
How a property is used can have significant tax implications. Acquiring a property with the intention of using it for short term accommodation can, in some instances, be a useful strategy, because if it is bought from a non-registered GST vendor, you can use the upfront GST refund to help fund the acquisition. But this approach does come with increased complications and compliance responsibilities.
Before any decisions are made, be sure to run the numbers to understand what your real returns look like when comparing classic residential rental with short term letting. We know Inland Revenue are actively focusing on this area, so be sure to obtain advice before you make any investment decisions to mitigate your risk.
