Accountant's advice?

[mikeey01]

I need some advise from an accountant regarding vehicle leasing.
Not leasing one but starting up a lease company and leasing it back to myself....

[McDuck]

I think i might subscribe to this thread...

[jafar]

I need some advise from an accountant regarding vehicle leasing.
Not leasing one but starting up a lease company and leasing it back to myself....

Are you talking a new vehicle or one you currently own & want to sell to the lease company & lease back ??

[Oakie]

Do I smell a tax dodge....?

[mikeey01]

either new or low k's near new, is there a difference in write offs?

[mikeey01]

Do I smell a tax dodge....?

nah I'm just wondering if I start up a lease company and lease the car back to myself (all legal and legit like) am I better or worse off?

[McDuck]

nah I'm just wondering if I start up a lease company and lease the car back to myself (all legal and legit like) am I better or worse off?

Well in thery you can claim GST back on all the cars costs as well as depreciating it and running it at a loss claim it against your income?

[p.dath]

I need some advise from an accountant regarding vehicle leasing.
Not leasing one but starting up a lease company and leasing it back to myself....

There is something known as the "associated person rule". You would be considered an associated person, and the tax department would set aside the structure for the purpose of your tax assessment.

[p.dath]

I need some advise from an accountant regarding vehicle leasing.
Not leasing one but starting up a lease company and leasing it back to myself....

And even then, you would need to be leasing it for a commercial operation to be able to claim operating expenses as a tax deduction.

If you were leasing it to yourself for personal use you would not be eligible for any deductions.

[McDuck]

And even then, you would need to be leasing it for a commercial operation to be able to claim operating expenses as a tax deduction.

If you were leasing it to yourself for personal use you would not be eligible for any deductions.

Could you how ever find somthing you are good at and have a back yard buisness that is GST regoed and run it all through that? Like selling shit on tard me or doing backyard fix jobs on cars/tvs/guns what ever?

[p.dath]

Could you how ever find somthing you are good at and have a back yard buisness that is GST regoed and run it all through that? Like selling shit on tard me or doing backyard fix jobs on cars/tvs/guns what ever?

Now you are going to be stung with the compliance costs of running a business.

First of all, if the vehicle is capable of being used for personal use then your going to have to pay 45% fringe benefit tax.

Next you are going to have to pay around 33% company tax on any income your commercial operation makes.

Then you going to have to pay someone to prepare and file all the different kinds of tax returns, plus prepare an annual set of accounts for you (unless your skilled enough to do this).

And if your also planning on creating a leasing company, multiple this work by two.

And how are you planning on paying yourself? By PAYE wages? Well your going to have to learn how to do payroll pretty quickly, and keep yourself up to date with all the law changes.

All your insurance is going to change, since personal insurance generally won't cover your for commercial operation, or the cover is limited.
You'll also need to consider public liability and professional indemnity insurance in case someone sues you.

And of course being a commercial operation, you are now bound by the consumer guarantees act, and a whole bunch of other legislation.


So the short answer is - don't even think about it.

[steve_t]

Yup. Costs unfortunately far exceed any benefits :(

[jafar]

If the vehicle is a "commercial" then you don't have to pay FBT on it @ all. This basically restricts you to vans & utes.
If you do choose to go down that track you have to sign write the thing to comply with the FBT legislation.

[McDuck]

Now you are going to be stung with the compliance costs of running a business.

First of all, if the vehicle is capable of being used for personal use then your going to have to pay 45% fringe benefit tax.

Next you are going to have to pay around 33% company tax on any income your commercial operation makes.

Then you going to have to pay someone to prepare and file all the different kinds of tax returns, plus prepare an annual set of accounts for you (unless your skilled enough to do this).

And if your also planning on creating a leasing company, multiple this work by two.

And how are you planning on paying yourself? By PAYE wages? Well your going to have to learn how to do payroll pretty quickly, and keep yourself up to date with all the law changes.

All your insurance is going to change, since personal insurance generally won't cover your for commercial operation, or the cover is limited.
You'll also need to consider public liability and professional indemnity insurance in case someone sues you.

And of course being a commercial operation, you are now bound by the consumer guarantees act, and a whole bunch of other legislation.


So the short answer is - don't even think about it.

I guess the business diploma i am starting isnt going to help at all (given i has an agribusiness slant?)

[McDuck]

I guess the business diploma i am starting isnt going to help at all (given i has an agribusiness slant?)

And in hall honesty from the studys i have done the tax system etc isnt 'that' hard to work out and there are not 'that' many law changes per year...

[Coldrider]

It is all covered on the IRD website, for free.