Tax Updates: 1 December 2025

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at [email protected].

Nothing too taxing…

As we enter the first week of the silly season, I’ve restrained myself from providing anything that requires you to think too deeply on a Monday morning. So, instead, it will be just a couple of rate changes and a date extension.

Effective from April 1^st 2026, the family tax credit and the Best Start tax credit are to be adjusted for inflation, which is required when the cumulative value of quarterly increases in the New Zealand Consumers Price Index (CPI), measured from that applying on 1 October 2023, is 5% or more. The CPI data indicated that the 5% threshold was exceeded by the end of the September 2025 quarter.

So the changes are:

• an adjustment to the family tax credit, increasing the eldest child rate from $7,524 to $7,921 and the subsequent child rate from $6,130 to $6,454;

• an increase in the Best Start tax credit from $3,838 to $4,041; and,

• an increase in the minimum family tax credit threshold from $35,316 to $36,604 from 1 April 2026 to reflect main benefit increases applying from that date.

For those of you in the Research & Development tax credit space, you’ll fully appreciate that applications for an activity to be approved (or for variation of an approval) must be made by the last day of the 3^rd month after the end of the income year for the former, and by the last day of the 15^th month after the end of the relevant year for the latter. In this regard, when it comes to a taxpayer with a 30^th September balance date, the due date falls on December 31^st, smack bang in the middle of the Christmas holiday period. An Order in Council has consequently extended the respective due dates to 15^th January 2026.

Lastly, but not least, a small Christmas gift for you all (since the amendment comes into force on Christmas Day), with the rate of interest that applies for fringe benefit tax purposes to employment-related loans being reduced from 6.67% to 6.29%. The new rate applies for the quarter beginning on 1^st October 2025 and for subsequent quarters.

Have a good week – hopefully not too crazy!ive.  

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.