Last Year's Changes, This Year's IMpact

17/1/2022

Last year, in 2021, several important legislative changes were made which new laws may be impacting your business or you personally.

ASCO Legal’s expertise includes a range of practice areas and we are here to help you navigate the effects caused by the changes. We have provided a short summary of the impact of some of these key changes and invite you to contact us for further assistance.

Changes in the following affected areas: -

Property ownership;
Trusts laws;
Consumer laws;
Assisted dying;
Employment.

KEY CHANGES MADE AND THEIR IMPACT

Property ownership

The bright-line test has been extended from 5 to 10 years for properties acquired after 27 March 2021;

Exclusion for “new builds” which will have a 5 year bright-line test;

A “New Build” is defined as a self-contained residence that receives a Code of Compliance Certificate confirming the residence was added to the land on or after 27 March 2020;

Interest deductibility will be phased out after March 2025 (with some properties being excluded);

Change of use rules now apply should a main home not be used as your primary home for a period of 12 months or periods together of more than 12 months during the bright-line period. The main home exclusion will not apply to the period/s for when the property was not used as a main home.

With the extension of the bright-line test to 10 years, there is no doubt this will give property owners and future property owners a lot to consider before buying or selling property. Contact us for advice on how these changes may impact you.

Family Trusts

The Trusts Act 2019 came into effect in the beginning of 2021 replacing the Trustee Act 1956;
Trustees now face increased compliance requirements;

There are mandatory and default trustee duties unless modified or excluded by the trust deed;

There are further requirements for managing trust information and disclosing certain trust information to beneficiaries, even without request. Information can be withheld in exceptional circumstances;

Beneficiaries need to be informed that they are beneficiaries.

The intention of the changes is to make trusts more transparent to beneficiaries. The effect of the changes are likely to result in more burdensome administrative compliance and costs. Whether you have an existing trust or contemplating creating a new trust, the above changes need to be considered and the appropriate steps taken. Contact us for guidance on how best to establish and manage your trust, or your compliance as a trustee.

Consumer laws – Credit Contracts and Consumer Finance Act 2003 (“CCCF Act”)
Several changes were made to the CCCF Act with the intention of providing better protection from high-cost loans and unaffordable debt. However, the effect has resulted in several mortgage applications being declined due to stringent lending requirements focusing on amongst other aspects consumers’ spending habits and affordability.

If you are purchasing or selling property, the changes intended to help protect consumers may well be a stumbling block to your sale or purchase. Its vitally important to have someone who can advise and guide you on the process as well as review the sale and purchase agreement before selling or purchasing. ASCO Legal may assist you whether you are selling or buying a property or a business.

Assisted Dying

As from 7 November 2021 there is now the choice of medically assisted dying in terms of the End of Life Choice Act 2019;

Certain prescribed criteria must be met before one is considered eligible for medically assisted dying;

There is also a strict process to be followed for the assessment;

The End-of-Life Choice Society NZ expects 100 assisted deaths by the end of the year.

The End of Life Choice Act 2019 is by far one of the most controversial laws to come into force in our history. How the issues of its implementation will be managed and its impact will be seen in time. It is a reminder to all of us that our time is not guaranteed and one should take appropriate estate planning measures while capable of doing so. We may help you with further information on assisted dying and estate planning, include Advance Directives, Enduring Powers of Attorney documents, and family trusts.

Employment

Increase in minimum wage rates;

Increase in the number of sick leave days from 5 to 10;

With an accumulation of up to 20 sick leave days.

Being an employer and running a business includes a number of compliance requirements. If you are an employer looking to revise your business governing documents, we at ASCO Legal can help ensure you are compliant and up to date. We can also advise on HR policies and protocols to have in place depending on the nature and size of your business that, while not mandated, may be useful in mitigating risk such as privacy, IT, leave (including sick leave and COVID related aspects) and sexual harassment and sexual harassment policies.