Business reporter for the NZ Herald

How do the super-rich spend their money?

The unit has identified 252 people worth more than $50m as at June 30 of this year. Photo / Getty
The unit has identified 252 people worth more than $50m as at June 30 of this year. Photo / Getty

The number of the super-rich Kiwis on the tax department's radar has jumped by almost 20 per cent in less than a year.

The Inland Revenue's High-Wealth Individuals Unit has identified 252 people worth more than $50m as at June 30 of this year.

That's up from the 212 it was aware of last October and from 200 at the end of 2014.

So how are the super-rich spending their money?

No doubt many are buying property - the investment of choice for many New Zealanders because of the tax-free gains to be made.

They could also be purchasing more luxury vehicles, based on estimates provided to the Herald from the Motor Industry Association.

Nearly 8680 luxury cars were first registered in this country during 2015, including five Rolls-Royces, nine McLarens, 12 Lamborghinis and 19 Ferarris.

Based on figures so far for 2016, the MIA estimates that 9605 luxury vehicles may be brought into the country this year. In the eight months to August, 6403 were newly registered.

Among these are two Rolls-Royces, 15 McLarens, 12 Lamborghinis and 20 Ferraris.

The 252 super-rich New Zealanders are closely associated with 7,676 entities, according to IRD investigations and advice manager Lynley Sutherland.

A number of these entities are in disputes with IRD over almost $111m of tax, Sutherland said in response to an Official Information Act request.

Of the 252 super-rich Kiwis, just over a third (88) declared income in 2015 of less of than $70,000 - the point when someone begins paying the top tax rate of 33c in the dollar.

Asked today if this tax system was fair, Prime Minister John Key said the argument the Government was letting high-earners off paying their fair share didn't bear scrutiny.

"What we know with high income earners is that they're usually high spenders and they end up paying a lot of GST," said Key.

Sutherland said it was common for income associated with high-wealth individuals to be declared in other entities such as trusts and companies.

Close to 40 per cent of the 212 super-rich New Zealanders being tracked by IRD last October declared income under the $70,000 threshold in the 2014 financial year.

- NZ Herald

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