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Project purpose

The high-wealth individuals research project is a statistical research project run by Inland Revenue. The project seeks to fill a gap in our knowledge of effective tax rates in relation to economic measures of income, particularly for high-wealth individuals.

Gaining this information will help us assess the fairness of our tax system, and allow us to provide more robust advice on future tax policy. The project will not make policy recommendations, but may feed into future policy advice.

The research will follow a robust methodology based on academic literature and seek the input of experts.

The effective tax rates calculated will compare the amount of tax paid by an individual with different measures of income – including a measure of economic income. Using different income measures allows as to assess what is fair through different lenses.

Economic income is a broader concept than taxable income – it seeks to measure the increase in an individual’s ability to consume goods and services in a period.

We will ask about 400 individuals for information

For the project, we’ve identified a group of about 400 high-wealth tax resident individuals. Similar to research undertaken using the Household Economic Survey, our analysis will be based on the family unit – including partners, and dependent children. 

We will estimate effective tax rates for the 2016 to 2021 income years

We will estimate effective tax rates for the 2016 to 2021 income years. Having several years will improve the consistency of the measures.

To minimise compliance costs for participants we will seek to use all information already available to us first – for example tax information or information from public registers.

Where we cannot obtain information, we will seek it from participants. We’ll be asking the group a number of questions about their finances for each year from the 2016 to 2021 income years. These questions will include information on the assets they own, entities they have an interest in, and gains made. We will not be asking for detailed valuation work to be undertaken.

Minimising compliance costs is an important principle in determining what information will be sought. We only expect individuals to provide information that they know or can reasonably obtain.

Collected information will not be used for tax administration or enforcement

We’re collecting this information to research economic measures of income and effective tax rates.

This information is important, so it will be a legal requirement for participants to complete the information requests. We will request information under section 17GB of the Tax Administration Act 1994 (the Act). This is a new legal power that allows us to collect information we consider is relevant for a purpose relating to the development of policy.

Information requested under section 17GB of the Act has specific statutory protections which mean the information cannot be used by the Commissioner in proceedings against the person providing the information.

This means that no information collected under section 17GB of the Act will be used to reassess anyone’s current or future taxable income. Only individuals working on the project will have access to the information collected under section 17GB.

Information and privacy will be protected

We will ensure the privacy and confidentiality of all the information we collect is protected. A Privacy Impact Assessment has been prepared for the project (see reports and assessments below).

The final report from the project will contain aggregated data and will not identify individuals.

Project timeline

The project will run for about 2 years, with multiple phases.

Late 2021

Individuals in the population were notified that they are in the population, and asked to confirm family details.

February to April 2022

In February 2022, we asked the lead individual for information about the various entities and business undertakings (that is, companies and trusts) they and their dependent children, if any, have an interest in. We also asked their partner (if any) for the same information in relation to the entities and business undertakings they have an interest in

June to August 2022

We'll ask individuals to provide a range of financial information about assets they, or their dependent children, own and gains they have made. Domestic partners will be asked for the same information.

The project’s findings will be made public

A final public report on the project is expected to be completed in June 2023. This report will not include any information that could identify individuals.

Last updated: 28 Sep 2021
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