High Wealth Individuals Targeted

Posted: 9th December 2010

In 2003 Inland Revenue set up a special unit to target high wealth individuals. 

 They stated that whilst high wealth individuals generally meet their tax obligations by registering, filing and paying taxes on time, due to the complexities of their business structures and associated entities, accurate reporting can be an issue. 

The unit reported that, for the year ended 30 June 2009 there were 250 high wealth individuals with 7,500 associated.  Of them, 161 individuals were selected for review. 

There has recently been another round of review letters issued by the Unit.  A typical letter does not ask for any information to be provided but does contain a list of the individual's associated entities.  In some cases, this can include brothers and sisters which seems odd. 

It is important to review the list of associated entities.  The lists appear to have been prepared by simply searching entities that have the individual as a Director, Shareholder or Trustee without actually determining the level of involvement of the individual.  The list may also disclose entities you didn't know existed, or that have long been disestablished. 

The letters are being sent directly to individuals rather than their advisors though we do usually receive a copy and will contact you if we do. 

If you have received a letter and have not heard from us please call Sudhir Lala on 09 308 4055 or email at sudhir.lala@tbag.co.nz