Tax Updates: 15 April 2026

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].

We finally made it!

After a challenging start to 2026, with illness and then hip replacement surgery, I’m struggling to believe that it is already April as I write this, but welcome to the first edition of AWIR for the year.

With time away from the desk and the consequent attempts to catch-up on work upon my return, something had to give and so admittedly I am a little behind on my year-to-date readings of the various tax-related releases by Inland Revenue (IR). In this first edition, therefore, I’m simply going to do a dump of what’s interesting reading (in my own humble opinion) for the first 3 months of 2026:

• Effective for quarters commencing 1^st January 2026 and subsequent, the rate of interest that applies for fringe benefit tax purposes to employment-related loans reduces from 6.29% to 5.77%.

• In early March, IR released interpretation statement IS 26/01, “Income tax – deductibility of repairs and maintenance expenditure – general principles.” The interpretation statement (IS) considers the general principles governing the income tax treatment of expenditure taxpayers incur in carrying out work on tangible property they use in a business or income-earning activity. IS 26/01 replaces its predecessor IS 12/03, with a purpose to reflect more recent legal developments, improve clarity, and reflect a more modern format. Included with the release are two fact sheets, IS 26/01 FS 1 which gives a quick summary of the key points from IS 26/01 and IS 26/01 FS 2 which gives a brief summary of the key points from IS 26/01 that specifically relate to leaky buildings.

• Also in early March, a draft QWBA (Questions We’ve Been Asked) referenced PUB00508, “Income tax – portfolio investment entity income from land development activities.” The QWBA considers whether income derived from developing land, dividing it into lots and/or erecting buildings on the land for the purpose of sale, is eligible income for a portfolio investment entity under s HM 12 of the Income Tax Act 2007. Deadline for comment is 15^th April, so you need to get in quick.
  
• Mid-March saw the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill (199-2) reported back to Parliament. The main proposals within the Bill included:
  • setting the annual rates for the 2025-26 tax year;
  • provisions for the tax treatment of non-resident visitors undertaking remote work while visiting New Zealand (NZ);
  • introducing the new revenue account method (RAM) for calculating foreign investment fund (FIF) income; and,
  • various provisions aimed at improving current settings for tax administration, the goods and services tax (GST) regime, KiwiSaver, and social policy rules administered by Inland Revenue.

The Bill received the Royal Assent on 30^th March 2026.

• Late March saw the release of draft standard practice statement (SPS) ED0261: “Options for relief from tax debt” for consultation, which sets out the Commissioner’s practice when considering the options of debt relief from the requirement to pay tax, interest and/or penalties under the Tax Administration Act 1994. The options available to the Commissioner are to write-off amounts, enter into an instalment arrangement, remit amounts, or a combination of these options. There are several factors outlined in the standard practice statement that the Commissioner will consider when granting relief from tax. The SPS will update SPS 18/04 and the deadline for comment is 8^th May 2026.

• On April 1^st draft QWBA “Income tax – Bare trusts and mortgages” with the reference PUB00544 was released for consultation. The QWBA considers whether a person can be a bare trustee under S YB 21 where there is a mortgage over the property held in trust. S YB 21 provides that if a person holds something or does something as a nominee (including as a bare trustee) for another person, the other person is treated as if they hold or do that thing, and the nominee is ignored for tax purposes. The deadline for comment is 11^th May 2026.

Over the coming weeks I will look to take a deeper dive into some of the above releases.

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.