We have been made aware of an email circulating purporting to be from the Inland Revenue Department, advising individuals and businesses of a tax refund available to them and requiring the recipients to download and complete a form within 48 hours.

Please be aware that this is a scam and should not be opened nor replied to under any circumstances. The most useful piece of information that you need to know is that the IRD does not send emails and if you ever receive any emails from the IRD they are bogus and insecure.

Inland Revenue released Question We’ve Been Asked QB(Question Been Asked ! )11/03: Income Tax – Look-through Companies and Interest Deductibility on 1 November 2011.  QB 11/03 considers whether interest will still be deductible where a person who owns 100 per cent of the shares in a loss-attributing qualifying company (LAQC) had previously sold their family home to the LAQC as a rental asset, to be rented to a third party on an arm’s-length basis: the sale was at market value; the LAQC borrowed from a bank to fund the purchase; the person then used the funds raised from the sale to purchase a new family home; and the LAQC becomes a look-through company (LTC).

QB 11/03 states that if all that has changed is that the LAQC has become an LTC, then interest deductions previously allowed will continue to be allowed, subject to the limitations on deductions in ssHB11 and HB12 of the Income Tax Act 2007 that apply to LTCs.  The position would be the same where a person sells their family home at market value directly to an LTC and the LTC holds it as a rental asset and rents it to a third party on an arm’s-length basis.