Hi All,
We are in the position where my wife is from NZ and we currently have an Australian Family trust.
We already have one IP (cash flow positive) in NZ which is in my wife's name and we have a contract for a second cash flow positive property.
Our accountant has told us we should put it in the name of the trust.
Obviously I am not after financial advice, just some guidance (pros and cons) as to whether this would be advisable or to put the property in my wife's name.Thankyou
Anthony SmithHi Anthony.
firstly NZ has no capital gains tax for NZ residence- i asume you are not planning on becoming NZ residents. if you are then my following comments would be different.
I agree with your accountant- the fact that the property is in NZ makes no real difference to your taxable income as the tax payable is on your world wide earnings and you will need to pay tax here in australia on the profits. Therefore a family trust would be an excellent vehicle for ownership of the property as it allows you to distribute the profit as you wish.
regards westan
Hi,
Beware of the foreign controlled corporation rules, which you should ask your accountant about.
I invest in NZ and use a NZ family trust (not an LAQC).
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
you can now (thanks to an AUS and NZ govt Co-operative agrement) also claim losses if you are negatively geared from across the tasman….. I believe this has bee since April 2008.
Family Trust would be okay for basic buy and hold purchases. Steve – if you are buying and selling you would have to be very careful about tainting with a family trust (assuming that everything is done in the same one) .
Anthony – if you duck over to the nz forum propertytalk and ask the same question there are a few expert lawyers and accountants that post on a regular basis that will help.
Probably of equal importance is that you clearly document your intentions when purchasing as to the purpose of your investment.
Property Trading ie the buying and selling of property for gain is taxable in NZ. You must pay (account for) GST and also pay tax on the profits.
There is a need to structure yourself so that you can keep your "hold" investments separate from "trading" investments. Trading is trading and investing is investing – just make sure that you keep the two separate.Â
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