by David Chaplin
In a letter sent out to advisory firms and insurance companies last week, the IRD said it would “take no other action” against advisers if they had a good tax history, had not earned non-commission income subject to GST and met these four demands by the end of May this year:
“Inland Revenue will consider all other situations on a case-by-case basis,” the IRD letter says.
However, risk advisers have been given some relief in that the annual income threshold for GST registration is set to rise from $40,000 to $60,000 once the government's new tax measures are confirmed.
As well as writing directly to known advisers, the IRD is also contacting dealer groups and insurance companies requesting they pass on the information to all non-GST registered advisers and provide feedback to the tax department.
“Please provide Inland Revenue with a list of the advisers contacted and details of their GST taxable commission and GST exempt commissions paid in the year to 31 December 2008,” the IRD letter says.
Martin Scott, IRD group manager insurance, told ASSET magazine this month that GST liable products included income protection, fire and general, health, disability and medical insurance but warned advisers to review all policies they sold.
“It is not possible to develop a definitive list [of GST-liable products] as there may be differences between the risks covered by products sold under the same general heading, and by different insurance companies,” Scott said.
In its letter to advisory firms the IRD also said that insurance policies with “non life rider benefits, such as a lump sum payment on temporary or permanent disability”, would also be liable for tax.
“Where additional commissions result from the sale or maintenance of non-life insurance products or benefits then this commission will be subject to GST,” the IRD letter says.
| « AXA's rating improves | Life insurance sales strong » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved