Charities that deregister on or after 1 April 2024 without re-registering within one year may be liable to pay deregistration tax.
After deregistration your charity has one year to reregister or dispose of or transfer any assets to a registered charity or a New Zealand tax-exempt entity. Income tax will need to be paid on specific net assets if they are not transferred. These will need to be included in your charity’s income tax return for the period of one year from the deregistration date. Any depreciable property and financial arrangements need to be valued after your charity is deregistered to determine the following year’s tax. IRD has published a guide for charities tax obligations here.
This, however, does not apply to small charities who have net assets of $10,000 or less. Certain adjustments can also be made to exclude specific assets, including assets donated to the charity when it was still registered.
We support many charities and our experts here at Parry Field Lawyers are happy to help if you have any questions or queries- stevenmoe@parryfield.com, sophietremewan@parryfield.com, michaelbelay@parryfield.com or annemariemora@parryfield.com
This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.
