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Financial Year End - 31 March 2018

March 7, 2018

With the 31 March 2018 year-end fast approaching it is an appropriate time to consider some long-term tax planning initiatives and undertake some short-term measures to minimise tax for the current year.


  • Review doubtful debts and write off any bad debts prior to balance date.Bad debts have to be physically written off to be tax deductible.
  • Holiday pay, long service leave and other employee remuneration such as bonuses can be deductible if paid during or within 63 days of the end of the income year.Make sure these are included in the creditors list you provide to us.
  • Trading stock valuation issues – It is important to complete a stock take at year-end.Stock must be valued at Cost or Market Selling Value, whichever is the lesser.This is a good opportunity to identify obsolete stock and look to value at market selling value if less than cost.Write off any obsolete or worthless stock.
  • Assets identified as no longer useful – sell or dispose of them prior to year-end to trigger loss on disposal.Defer disposal if depreciation is to be recovered.
  • Consider prepaying expenses such as consumable aids, advertising, stationery, travel bookings and subscriptions before balance date to claim a deduction in the current financial year.
  • Companies – if you have an ICA debit balance, consider a pre-payment of 2017 Terminal Tax (due 7 April 2018) before 31 March 2018 so that the payment is in the current financial year.
  • Review income recognition policy.Any deposits received in advance of goods and services being provided will not be income.The same treatment will apply to retentions.
  • Can depreciable assets be broken down into component parts to obtain higher depreciation claims eg. building fit out, computer componentry, rental properties.
  • Unrealised foreign exchange losses in relation to short-term trade credits can be deductible by electing to treat short-term trade credits as financial arrangements.
  • If you are GST registered and pay Provisional Tax, have you considered the GST Ratio option for your Provisional Tax payments – Application for GST Ratio must be made to IRD before the start of the next financial year.

Long term tax planning issues include the transfer of income generating assets including shares to family trusts.This can be particularly effective in mitigating the 33% tax rate in relation to dividend income from trading companies.There may also be opportunities to maximise interest deductibility by restructuring private borrowings.

Please contact us if you need any assistance with any of the above.

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