It's been two weeks since we moved into our new offices at 433 St Asaph Street and it's great to be back in appropriate offices. In fact, we're enjoying it so much here we wanted to share a few more photos with you! Check out our facebook page to see them all.

Thank you for all the positive feedback we've received and we look forward to seeing you again soon.

Yay! It's been a long time coming, but we've finally relocated into our new premises at 433 St Asaph Street, just east of Fitzgerald Ave. We have plenty of client parking available outside the office, so we look forward to seeing you again soon!

An unfortunate, but expected consequence of the recent Canterbury earthquakes has seen the dramatic increase in insurance excesses for natural disasters. Previously excesses were based on a percentage of the loss, subject to a minimum dollar amount. On renewal, many clients are now faced with natural disaster excesses of $100,000 plus.

While you may be unable to reduce this excess we urge you to fully read your renewal documents and be aware of any potential exposure.

Source: Searells Business Improvement & Chartered Accountants

Happy new year! We hope you managed to have an enjoyable break - despite the shaky start. As a result of these earthquakes that hit Christchurch on 23rd December our temporary premises at 314 St Asaph Street have been compromised and we have had to relocate again into temporary premises. For the next 5 to 6 weeks we will be operating from 55 Ferry Road, upstairs in the Redpath's Electrical Boardroom. Our office hours and all other contact details remain the same.

Merry Christmas and a Happy New Year!

The Searell’s Team wishes you and your families a wonderful Christmas and safe and happy holidays!

Our offices will be closed from 5pm on Friday, 23rd December, and will be open again with our standard office hours from Friday, 13th January 2012.

Should you have an urgent enquiry during this period, please contact Glenn Morris on 0274 500 831, or Sharon Wedlock on 0274 476 233.

Alternatively, you can leave a message on our answer phone or email us at searells@searells.co.nz and we will have the appropriate team member contact you when we re-open.

We look forward to working together in 2012.

Seasons Greetings,
The Team at Searells

If you have a rental property in the red zone and you accept the Government’s offer, it is deemed to be a sale of your rental property. If you have claimed depreciation on the building and/or chattels, and you sell the property for more or for less than the current book value, then you may have a tax issue.

For example, a husband and wife have owned a rental property for the last 7 years, it is in the Red Zone and they are going to take the Government’s offer. The value of the house (only) was originally $141,000 and the depreciation claimed to date is $32,000 and the book value is now $109,000. If the Government’s offer differs from the book value, then there is a depreciation tax issue that needs to be dealt with.

The Government are currently reviewing the ‘timing’ of depreciation recovery rules on the sale of buildings due to the earthquake. For example, if you purchase another residential rental property you may be able to transfer the depreciation claimed to the new property.

There are a number of issues surrounding rental or commercial properties in the Red Zone and there is no ‘one rule fits all’. If you would like to discuss your situation please contact us.

Source: Searells Business Improvement & Chartered Accountants

We are coming up to the 1st anniversary of the day that changed our feelings about Earthquakes – 4 September 2010 was the beginning of a difficult year for us in Christchurch. If you have business interruption insurance, and suffered damage from this earthquake, time is fast running out for your claim.

While your claim may not necessarily need to be filed before 4 September 2011 (although we would thoroughly recommend it!), any increased costs of working that may be covered under the policy will expire on 4 September 2011 if you have a 12 month indemnity period. Now is the time to incur these costs but make sure the costs are dated prior to 4 September if they relate to the 4 September Earthquake to avoid complication with your claim.

Source: Searells Business Improvement and Chartered Accountants

Inland Revenue has published a "Revenue Alert" highlighting their concerns that some people are claiming tax credits for "donations" where there may not have been a true gift of money to a charity.

The arrangements that have come to their attention involve smaller, locally-based charities, and typically involve a payment being made in the expectation that the donor would receive something in return.

Any payment of over $5 to a charity can potentially qualify for a donations tax credit if it is a gift. To be a gift it must:

• Be made voluntarily; 
• Provide a material benefit to the recipient without imposing a countervailing detriment; 
• Be for no consideration; and 
• Provide no material benefit or advantage to the giver in return. 

You may wish to read Inland Revenue's "Revenue Alert", to be sure that your charity is complying with tax laws, and (if your charity is also a donee organisation) that your donors are able to claim tax credits when they make donations or gifts.

Full information can be found by clicking here. For more information about donee organisations, see: www.ird.govt.nz/non-profit/np-donee/

Article from: The Charities Commission

If you have you changed your residential rental property into a commercial rental property, you may need to read this!

As reported on Campbell Live Leonie Guley flew out of Christchurch to start a new life with her husband in Perth. But with her departure Leonie leaves behind a significant issue that needs urgent clarification by the powers that be:


The answer could be worth millions of dollars and impact on hundreds of Christchurch residential property owners.

Leonie recently got new tenants displaced by the earthquake, they use her rental property as a base for their marketing business - but that has resulted in the cancellation of her EQC cover and her house insurance.

Reporter John Sellwood caught with Leonie before she left the country. Click here to watch the interview.

Source: www.3news.co.nz

The government is intending to abolish gift duty from 1 October 2011. The abolition of gift duty is an opportunity to restructure family interests where there is a valid commercial or succession planning reason for doing so. However, careful consideration needs to be given before fully gifting off any asset as there may be long term ramifications you have not thought of, for example:

• Loss of control of the assets – if they are gifted to a trust they are under the control of the trustees
• Trust administration needs to be correct to avoid the trust being challenged as a sham
• Gifts are likely to be challenged where they have been made to avoid creditors, former partners, for tax avoidance etc
• There may be tax consequences such as depreciation recovery.

Opportunities certainly exist for many with the abolition of gift duty however, as with anything, individual circumstances need to be considered and suggest we review your situation in conjunction with your lawyer because there is no one answer fits all as to whether all of your assets should be gifted. In the meantime we recommend you continue with any gifting programmes until your particular requirements have been determined.

Written by Searells, Business Improvement and Chartered Accounting, July 2011.