Even though farming returns are high at present the Income Equalisation Scheme may still be an option for you.

To lower your taxes for a certain year, you need to defer extra income by using the IED Scheme. Income deposited to the scheme is treated as a tax deduction for that particular year, but what happens to your deposit?

No need to worry! Your money is kept safe as part of the IED Scheme. It is just like keeping some money in the bank. In fact, Inland Revenue even make it ‘grow’ by giving you an interest rate of 3%. The money doesn’t have to stay in the scheme either. You are completely free to make an application to withdraw funds (subject to stipulations/rules) if you need money for things such as buying equipment or completing maintenance work on your farm.

We will always discuss this option with you as part of your overall business plan and like all things in life it will be Taylor made for you, if you have any queries then please do not hesitate to give us a call at CMK accountants on 06 765 6718 or email cmk@cmk.co.nz