CAPTAINS LOG: THE FIRSTMATE BUSINESS ACCOUNTING BLOG
Keep up to date with Firstmate and the Xero accounting world through our Business Accounting Blog. We'll let you know important dates, notable changes and other bits and pieces worth knowing to keep your business running smoothly.
Join us on facebook05.14.2014
If you haven’t already head over to facebook and like our page.
This week we have shared a video giving an overview of the powerful job management Xero add-on GeoOp.
If you are in the trades you definitely need to check out what GeoOp is all about and how it will help you on a day to day basis within your business.
Like us here: http://www.facebook.com/firstmateaccountants
Overdrawn Current Accounts04.30.2014
Question
Company A has made a loan to a related family trust.
Is Company A obliged to charge interest to a Trust, where that trust has an overdrawn current account?
Answer
Yes, Company A should charge interest on the advance provided to the family trust. If no interest is charged there is a risk the advance will be a deemed dividend.
A deemed dividend will arise where there is a transfer of value and the transfer is caused by a shareholding relationship (i.e. the recipient (the trust) is associated with the shareholder) [ss CD 4, 6(1)(a)(ii), Income Tax Act 2007]. The deemed dividend would be equal to the difference between the interest charged (if any) and the interest calculated at the prescribed FBT rate.
To avoid a deemed dividend arising, Company A would need to charge interest at a market interest rate.
Financial Reporting Act Confirmed03.20.2014
On 13 March 2014, the Minister of Commerce, the Hon Craig Foss, and the Minister of Revenue, the Hon Todd McClay, announced that the Financial Reporting Act 2013, which changes financial reporting obligations for most companies, comes into effect on 1 April 2014 and applies to income years starting on and after 1 April 2014.
Welcome to our Blog06.13.2013
Ahoy and welcome to the Firstmate blog: Captains Log! We’ll be regularly posting Firstmate news, Xero tips, business advice, tax matters and other worthy items here over time. So keep checking back for any new items and share these on facebook, twitter and Google+.
Check out the Firstmate press release from scoop.co.nz announcing the launch of Firstmate:http://www.scoop.co.nz/stories/BU1306/S00448.htm