Our membership with the Global Restructuring and Insolvency Professionals (GRIP) network gives our clients and their referrers access to qualified and highly experienced insolvency and business recovery practitioners in over 36 countries worldwide.

The GRIP network was created in 2014 in Europe to provide a cross-border referral and marketing network for independent insolvency firms. Members are invited to join and commit to supporting each other to secure locally based work and resolve complex issues. GRIP members are based in Europe, Canada, Central and South America, Australia and the Asia-Pacific region.

Whether you need professional assistance with restructuring, selling assets, or winding up a company, a fellow GRIP member who has strong local knowledge, understanding of local regulatory and legal requirements, and contacts can help ensure a smoother process and optimal outcome.

Contact Iain McLennan today to find out more about our international connections via the GRIP network on +64 9 303 0506  or by email:  This email address is being protected from spambots. You need JavaScript enabled to view it. 

Inland Revenue on Covid-19 Impact      Video Link Here

The IRD have advised that if taxpayers are adversely impacted by COVID-19, and they pay the outstanding core tax as soon as practicable that they will automatically write-off any penalties and interest. Taxpayers who are impacted by Covid-19 are suggested to apply for instalment arrangements. Customers who may already be in an arrangement but consider they may not be able to continue with the current terms due to being significantly affected by COVID-19 may ask to renegotiate an instalment arrangement. The key message is to get in contact with IRD.

It is the Commissioner’s view that a customer has been significantly adversely affected by COVID-19 financially where the customer’s income or revenue has reduced as a consequence of COVID-19 and that as a result of that reduction in income or revenue is unable to pay their taxes in full and on time.

The type of relief available for new debt due to COVID-19
• Instalment arrangement
• Instalment arrangement - deferred payment start date
• Partial write-off due to serious hardship and payment of the remaining tax by instalment or a lump sum
• Partial payment and write-off the balance under maximising recovery of outstanding tax
• Write-off due to serious hardship

You can request interest and penalty remission due to COVID-19 through myIR under the “I want to” menu by choosing “Notify of impact by COVID-19”. To request remission of penalties and interest you will be asked to confirm that:
• Some, or all of the amounts owing were due on or after 14 February 2020,
• Your ability to pay by the due date, either physically or financially, has been significantly affected by COVID-19,
• You have contacted the Commissioner as soon as practicable to request relief and your client will pay the outstanding core tax as soon as practicable.

Wider Government support available for businesses adversely impacted by COVID-19

There are a wide range of support measures available for businesses. A summary is in the table below (courtesy of IRD), and full details are available on the www.business.govt.nz webpage Financial support for businesses — business.govt.nz.


If the position is dire and this is the last straw, our staff are availalble to discuss insolvency options for companies. If you just need time, we recommend getting in contact with your tax agent to communicate with IRD and seek an instalment arrangement.

Video Link Here

July has mirrored the insolvency appointment figures over the last couple of months. The pressures affecting our economy have also remained fairly consistent over the last few months:
- Countries are continuing to fluctuate in and out of COVID-19 lockdowns
- Businesses and consumers are facing ongoing shipping delays and supply shortages
- Consumer demand for goods continues to exceed supply in many areas
- Labour shortages remain an issue
- Inflation remains higher than RBNZ’s targets and the affordability of goods remains an issue

To the end of July, the outlook for growth has continued to look positive:
- Unemployment rates have now fallen to pre-COVID-19 rates.
- The construction industry and the housing market continue to run hot
- Consumer spending remains strong
- The Reserve Bank has halted its Large Scale Asset Purchase programme

At the beginning of this week, most economists were predicting that the OCR would increase in the first time in 7 years. While the messaging continues to be that we should expect the OCR to increase before the end of the year, with a view to moving to an OCR of 2% by the end of 2023, subject to the impact of the latest COVID-19 lockdown. By the end of July, banks had already increased interest rates over the last couple of months, anticipating the August 2021 OCR increase that did not eventuate. We doubt that banks will decrease their mortgage rates before the next OCR update, given the indications that we should still be expecting the OCR to rise.

Data shows that 80% of residential borrowers currently have their mortgage interest rates locked in for 1 year or less, largely as a result of the historically low mortgage rates that have been on offer over the last few years. For new home owners with a 30 year mortgage, a 2% increase in mortgage rates will increase the monthly repayments on a $500,000 loan by around $550 per month. If wages do not increase in line with the cost of living, many could struggle to meet theses higher repayment obligations.

If you want to have a free chat about any issues your business is experiencing or about any other insolvency matter, contact us on 0800 30 30 34 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations

The number of company insolvency appointments in July 2021 were:
- Consistent with May and June this year, both by number and type of appointment
- Comparable to July 2020 but there were significantly more court appointments in 2021 (up around 68%)
- Down 20% compared to July 2019

The spike in solvent appointments is likely attributable to companies waiting for their financial statements to be prepared following the end of the 31 March 2021 financial year and other companies having a 30 June or 31 July balance date.

The number of liquidators being appointed by the Court on insolvent liquidations increased from 37% in June 2021 to 44% in July 2021. This trend is not surprising, given the number of liquidation applications that have been advertised in 2021.

Notable insolvency appointments in July:
- Receivers have been appointed over West Coast Brewery (New World Investment New Zealand (in receivership)). The business was listed for sale after one of its key people, a non-resident, could not get into New Zealand due to COVID-19 boarder restrictions. When the receivers were appointed, the business had not yet been sold.
- Many of the companies that were subject to insolvency processes this month operated in the following industries:
o Construction
o Dairy
o Forestry
o Hospitality

Personal Insolvencies - Bankruptcy

The number of personal insolvencies has been fairy consistent month on month since April 2021. Bankruptcies were around 24% higher in July 2021 than in in the previous few months, which correlates to fewer no asset procedures and debt repayment orders in July. This shift might indicate that the there has been more payment default on bigger debts.

As the cost of living continues to increase and more companies fail, we expect that there will be more payment defaults and demands made on guarantors. Personal insolvencies are likely to increase as a result.


Winding Up Applications

The IRD’s enforcement activity has continued but the numbers have eased off slightly since June 2021. It was the petitioning creditor in 66% July’s liquidation application and continues to lead the way by advertising 67% of all creditor applications in the year to date.


In the year to July 2021, 418 winding up proceedings have been advertised and 255 of the named debtors (61%) have ended up in liquidation. The IRD has advertised 161 (63%) court applications. The table below shows the number of companies that have gone into liquidation after their liquidation applications were advertised and how many of those were advertised by the IRD.


We have passed the halfway point of 2021 and it is now less than six months until Christmas. Quite a bit has happened in the first half of the year so let’s look at how the NZ economy has tracked to June 2021.

The global economy continues to face a number of challenges, which are impacting many countries to varying degrees:

- Countries are fluctuating in and out of lockdowns as a result of ongoing COVID-19
- Shipping delays are continuing
- There are materials shortages affecting many industries
- Consumer demand for goods continues to rise while international travel continues to be restricted

We see the building industry as one to watch. In New Zealand, COVID-19 brought a further increase in demand for housing as New Zealanders returned from overseas, many of them with house deposits. Because of ongoing shortage of housing supply (materials and labour), upward pressure is being put on housing prices. While the building industry appears to be picking up, the travel bubble between Australia and New Zealand may entice some builders to Australia to take advantage of the better wages and lower cost of living on the other side of the ditch, which will not help New Zealand’s house shortage.

Core Logic has reported that house price growth slowed down in May and June 2021, especially in the larger centres. It is too early to know whether this decrease in growth is the result of changes to the interest deductibility rules for property investors and/or an increase in the bright line test from five to ten years. Interestingly, mortgage rates under two years decreased while mortgage rates over two years increased in June 2021. As we now know, the short-term interest rates have since increased. We will also need to wait to see whether property investors start to exit the market, once they are faced with higher tax obligations on their rental properties, and whether fewer property investors will enter the market now that the bright line test has doubled.

As we anticipated in May 2021, we are seeing early signs that inflation is returning to the economy. Expectations out of Wellington are that inflation will be above the 1% to 2% target in the June and September 2021 quarters and will then return to within the target range after that. Experience would suggest that prices are quick to go up but are slow to come down and it is unlikely that the shipping delays and supply shortages currently being experienced will be resolved by the end of the year.

Off the back of the inflation figures, economists have been reviewing their OCR predictions and many are now expecting to see interest rates rise further before the end of the year. It is not surprising that the banks have already increased interest rates. Many are now expecting that the OCR will be back up at 2% by the end of 2022 to keep inflation under control. For new home owners, the predicted increases in mortgage rates could see those currently locked in at low rates really struggle with repayments when those fixed rates expire.

If you want to have a free chat about any issues your business is experiencing or about any other insolvency matter, contact us on 0800 30 30 34 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations

Company insolvency appointments for June 2021 were:

- similar to May 2021
- higher than June 2020
- similar to June 2019 – the first time the 2021 monthly figures have been close to the monthly figures in 2019

Insolvency numbers have increased steadily over the June 2021 quarter and are higher than the same quarter last year. This increased activity is likely the result of a jigsaw puzzle of factors including the increased pressure being put on companies by the IRD, labour shortages in many industries, seasonal show downs in some sectors, and the very limited number of overseas tourists that have visited since New Zealand’s boarders were first closed. While we saw Wellington move to Alert Level 2 for the last week of June 2021, affected businesses who met the Resurgence Support Payment criteria were able to apply for a lump sum government support payment.


Notable insolvency appointments for the month:
• ASB Showgrounds (Auckland Agricultural Pastoral and Industrial Shows Board) went into liquidation. It has been reported that the cost of the ground rent made it unsustainable for the venue to continue operating.

While there were no other companies of note that had insolvency practitioners appointed in June 2021, there were quite a few appointments in two industries, despite perceived booms in both industries:
• building and construction
• transport and logistics

Personal Insolvencies - Bankruptcy

The June 2021 personal insolvency figures closely mirror the May and April 2021 figures, in both numbers and breakdown by type. If inflation and mortgage rates both rise, as predicted, we expect the increasing cost of living will see more payment defaults, which will likely result in more personal insolvencies.

Winding Up Applications

The IRD’s activity continued to ramp up through to the end of June 2021. It was responsible for advertising 76% of all June 2021’s liquidation application.

There has been 341 winding up proceedings advertised in the year to June 2021 and 210 of those (61%) have ended up in liquidation. The IRD has been the petitioning creditor in 130 of those applications (62%).


Let’s look at the NZ economy and the insolvency space in May 2021.

In the media, the concerns about the current labour shortages grew. While these concerns were previously focused on the horticultural sector (a shortage of pickers during harvest) and the hospitality sector, the number of industries calling out for workers is increasing. Of late, the labour shortages in the construction sector – an issues that has been around for some time – have been noticeable, as anyone who has tried to organise a tradie or become a DIY expert thanks to YouTube can attest to. Supply shortages for building materials is also biting, which is not helping New Zealand’s ever present housing crisis.

The pressure points for the economy continue to loom. While some critical issues are being addressed urgently to address their negative impact, other issues have been put to the back burner. It looks like shipping issues and materials shortages will be with us for some time. China has gone on a materials spending spree but has overwhelmed its ports in the process. China’s ports backlog has the potential to cause more shipping disruption than the March 2021 Suez Canal blockage – the canal was blocked for six days but disrupted global shipping for months plus the vessel and its $3.5 billion in cargo has not yet been released.

There is continued talk of the pressure on the NZ housing market. Although the government and others are looking to increase supply, they are constrained by both material and labour shortages. It looks like the house price projections outlined by the government in their last budget seem overly optimistic and, when looked at critically, unrealistic.

Inflationary pressures are continuing to creep into the economy. The cost of goods is on the rise as a result of supply shortages, wage increases, and government policies that have increased the cost of doing business. The Reserve Bank will likely tolerate these inflationary pressures for a time but some economists are questioning whether the projected OCR increases will be brough forward. Banks have started to price interest rate increases into their longer- term (3+ year) mortgage rates but, paradoxically to some, lowered their shorter term interest rates. As mortgage rates rise, many will start to feel the pinch, especially those who took out a mortgage after mid-2008, as we have been in an environment where the OCR has tracked down and interest rates have generally been on a downward projection. In March 2008, the average one year “new standard residential mortgage interest rate” was 9.9%, in March 2009 it was 5.76%, and in March 2021 it was 3.24%.

If you want to have a free chat about any issues your business is experiencing or about any other insolvency matter, contact us on 0800 30 30 34 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Company Insolvencies – Liquidations, Receiverships, and Voluntary Administrations

Company appointments are only slightly down on 2020 levels and the number of insolvency appointments in May 2020 and May 2021 were similar. The types of appointments are, however, quite different. Solvent liquidation have continued their upward trend, with 17.8% of the total liquidations in May 2021 being solvents.


Notable insolvency appointments in May 2021:
• Wine Industry
o Four companies in the Sacred Hill group of companies (including the parent company) had receivers appointed, one of which has also been placed into voluntary administration. Another one of the companies in the group was placed into liquidation by its shareholder.
o Villa Maria’s parent company (FFWL Limited) had receivers appointed.
• Building Industry
o Silverfern Property Services Limited, the largest recipient of emergency housing funding, was placed into liquidation by its shareholders.
o Ormiston Rise Limited, a KiwiBuild supplier, was placed into receivership.

Personal Insolvencies - Bankruptcy

Personal insolvencies have continued to decline year on year and the 2021 figures are lower than comparable periods in the pre-Covid-19 disruption period. Notably, May 2021 figures are only slightly above May 2020. Bankruptcy figures to decline, with many individuals in trouble opting to submit to a No Asset Procedure or Debt Repayment Order. Is this a positive sign that individuals are taking early action in response to financial pressure rather than burying their head in the sand and letting the debt blow out? We will continue to monitor the position.


Winding Up Applications

Winding up applications for the year to May 2021 have picked up slightly month on month. Since the start of the year, the IRD has been applying pressure to those in default and who were given a grace period in 2020. While the IRD was lenient following the Covid-19 outbreak and quiet in the period leading up to the election (which is common), the IRD has advertised over half of all the liquidation applications in the year to date and was the petitioning creditor in more than 80% of all liquidation applications advertised in May 2021 .

To date, 260 winding up proceedings have been advertised. Of those, 160 (61%) have ended up with the debtor company being placed in liquidation. The IRD was the petitioning creditor in 88 of the 160 (55%) of the court ordered liquidations so far this year. This is another trend we will continue to monitor.



The Income tax Act 2007 allows a company to make a tax free distribution of capital gains “on liquidation”.

The IRD issued publication QB20/03 on 11 December 2020. The publication discusses the first step legally necessary to achieve “liquidation” in both the short form (s318(1)(d) Companies Act 1993) and long-form liquidation (s241(2)(a) Companies Act 1993).

IRD have confirmed when “liquidation” occurs under each process. It reinforces BR Pub 14/09 that a short form liquidation commences (for tax purposes) when a valid resolution is passed, when the directors (and/or shareholders depending on the constitution) make the decision to wind up the business, pay all creditors, distribute surplus assets and request removal from the register of companies, and then carry out the short from liquidation process. It also confirms that the first step legally necessary to achieve a long form liquidation is not the same. A long form liquidation commences when the shareholders pass a resolution to appoint a named liquidator.

Can you lose liquidation status?

The commentary talks of the trigger for losing the “on liquidation” status under the short form method. Quite simply, if the company continues to trade after the winding up resolutions under the short form process or before the formal liquidation, there is a risk a capital distribution in that period is taxable. Also, if a company commences a short form process then there is a significant delay or does not complete the formal strike off, earlier capital distributions may be held taxable.

Directors need to be wary that when they decide to wind up their company and opt for the shortform method that they cannot be held to have traded in the winding up process and they cannot incur significant delay without reason. Refer IRD’s example 3 below. The short form liquidation process must lead to the company strike off.

Can you change process from short form to long form?

Example 1 below shows it can take time to achieve a winding up, even years.

Changing processes from short to long form is less clear. The article suggests “unforeseen processes” as a legitimate reason. It does not specify the common position where companies resolve to wind up their businesses, start to carry out that process and then appoint a liquidator to complete the process down the track. Liquidation for tax purposes starts on the winding up resolution and then the formal long form liquidation starts from the shareholder resolution appointing the liquidators by name later. It seems so long as there is a clear intention and reason to change process that this is acceptable.

These are the key clauses relating to the change of process, from my perspective are at 12 and 13 of QB20/03 :

12. Changing Processes “Sometimes, a company that has embarked on a short-form liquidation may find it necessary due to unforeseen circumstances to appoint a liquidator. This could occur, for example, where a dispute arises in the course of winding-up the business that would be better to have a third-party liquidator resolve. The Commissioner considers that the period known as “on liquidation” began when a valid resolution was passed commencing the short-form liquidation process.”

13. Time Delays “In some cases, there may be an extended period between the first step legally necessary to achieve liquidation and the removal of the company from the register. The period may even span different tax years, so that a distribution is made in a period preceding the removal of the company from the register. The Commissioner will assume that any distributions are made pursuant to a genuine intention to liquidate. However, if the liquidation is not completed or, in the case of a short-form liquidation, the company does not cease to trade after a resolution to cease to trade is passed, then such a distribution will not have occurred “on liquidation” and the distributions will be taxable.”

This suggests that a company may change processes so long as there is a genuine intention to liquidate from the outset and “on liquidation” occurs from the initial resolution (so long as further trading does not disrupt that).

The Examples provided