Barry Soper: What you need to know about the Tax Working Group report

Sir Michael Cullen's working group has today recommended a swathe of changes to New Zealand's tax system. Here they are in a nutshell:

Capital gains tax (CGT) to apply after the sale of residential property, businesses, shares, all land and buildings except the family home, and intangibles such as intellectual property and goodwill.
Tax rate to be set at the income-earner's top tax rate, likely to be 33 per cent for most.
Calculation of gains to not to be retrospective - tax to be applied to gains made after April 2021.
Art, boats, cars, bikes, jewellery, personal household items and the family home to be exempt.
Losses on the sale of assets bought before April 2021 will generally be able to be used to reduce paid on gains from other assets.
Increase the threshold of the lowest tax rate (10.5 per cent), allowing more income to be taxed at the lower rate.
Increase social welfare net benefits to allow similar benefits as low-income earners post tax threshold adjustments.
House on farms and surrounding land up to 4500 sq metres exempt from CGT, calculated as a percentage of total farm value.
CGT on small businesses can be deferred (roll over relief) if annual turnover is less than $5 million and sale proceeds are reinvested in similar asset class.
No support to make company tax progressive ie smaller companies paying less than 28 per cent.
Capital gains tax estimated to raise $8.3 billion over five years.
Expand coverage and rate of Waste Disposal Levy, expand the ETS and use congestion charging.
Better tax benefits for Kiwsavers on low and middle incomes.

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