Depreciation which country

Hi there,
I have owned NZ property in both structures.

“To answer your qustion if you buy in an Australian structure your not in the New Zealand tax structure your in ours.”
Actually you would be in both systems then. The Australian Trust that owned property in NZ requires a full NZ tax return complying with NZ Tax Laws for a foreign trust. However the Trust then has to do an Australian return as well (one good reason not to have an NZ trust – save on tax returns!!) the Aussie Trust then distributes the income to its beneficiaries who pay tax at their personal income tax rates.
Both the Aussie and NZ structures were able to take out loans without difficulty.
The benefit of NZ complying Trust is that it can chose to hold the income in the trust and pay tax at Trust rates.
The Australian trust cant do that I am told.
So definitely a benefit to buying in NZ using NZ structures as nkibel has said (my information is based on my own experiences and my own accountants advice. You should check with your own advisors to be sure that what you do suits your circumstances)
Cheers
CD

Cheers
CD
CastleDreamer
http://www.nzpropertytogo.com

Bottom line is if you want to take advantage of NZ’s depreciation, and the potential to not get caught with CGT in Australia you need to set up a struture in NZ that will enable you to repatriate money in OZ.

It’s important to understand that according to the ATO any Australian entity or person making a capital gain anywhere in the world is subject to CGT whether or not the monies are repatriated in Oz.

The good news is there a structure that can achieve these goals but it took us 12 months and thousands of dollars to achieve it (and it doesn’t include an LAQC which is what every man and his dog goes on about).

Anyhow there’s a bit more about the different types of structures in our book, but your best bet is to get a really good accountant in NZ who will work with your Australian accountant to ensure the structures in both countries are talored to your needs.

Happy hunting!
Sigrid

http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian Investors

I would add that there are a couple of qualified accountants here on the forum who have NZ experience, and would be good people to get taxation advice and structuring advice from. Read lots of books and ask lots of questions, but at the end of the day, make sure that you use the right people to gain advice from – and its worth paying to get that advice as Nigel and Sigrid admit!!! I know, i’ve been the recipient of bad advice from people I should not have gone to because they were not specialists at what I needed.

Cheers
CD
CastleDreamer
http://www.nzpropertytogo.com

hi samuri,

in addition to the comments above you could try “Successful Trust Management”by Ross Holmes. He is a solicitor that has published widely on the subject. Good luck with it all.

P.S That book has a fair bit of practical advice and examples so it may answers some of your questions. Then when you seek professional legal advice you will be on the same page as the solicitor and be ready to ask the right questions.

Good Luck