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From 1 April 2020, the reporting requirements for investment income are changing.

Information requirements

Interest payers do not need to withhold tax on interest they pay if the:

  • interest is on funds that do not generate taxable income
  • amount of interest paid to generate taxable income is less than $5,000.

If this applies to you, the following information is required for each of the income recipients who received interest:

  • their name
  • their contact details
  • the amount and type of interest paid to them.

If it is available, you need to provide the following information for each of the income recipients who received interest:

  • their IRD number or foreign equivalent
  • their date of birth.

You must provide the name of any joint owners. If held, you also need to provide the following information for any joint owners:

  • IRD number
  • date of birth
  • contact address.

You will need to report this electronically unless you have an exemption.

This is all due when you file your income tax return. 

Filing investment income electronically

Correcting errors in investment income reporting

Reporting requirements before 1 April 2020

Transitioning to the new investment income reporting requirements

Example: James borrows money to buy a house.

James borrowed $200,000 from his parents to buy a house and pays $12,000 of interest. James runs a taxable activity selling go-carts from his garage. The garage is 20% of the floor area of the house so $2,400 of the interest is attributed to his taxable activity. 

James does not have an RWT obligation in relation to the interest as only $2,400 of it relates to his taxable activity and this is less than $5,000.

James will instead need to file the investment income information described above with his return of income for the corresponding income year.