Tax/GST/LTC Expert

Ask Mark Withers, director of Withers Tsang & Co questions relating to Tax and Asset Structures

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

Tax deductibility for rental

Kylie asks:

I have been renting out my property while I have been travelling around NZ.

I know my rental will make a loss this year.

Am I able to off-set these losses again any personal NZ income that I have earned in 2015 to receive a tax refund?

I haven't set up a company for rental property as I only have the one property.

However, it is being privately managed by an rental agent.

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Tax residency concerns

Preeti asks:

My property is rented out in New Zealand. I work and live in Australia.

I file a NRIR3 tax return in NZ for this properties rental income and expenses.

I also show income and deductions for this property on my Au Tax return as foreign net income or loss which is allowed to be offset against my employment income earned in Australia.

Do my losses keep accumulating in New Zealand? And how do I deal with this on my tax return in NZ?

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Trans-Tasman depreciation

Kathryn asks:

I have an investment property in Tauranga which I have held since 2004 and I have lived in Sydney since 2002.

I am considering selling the property and would be making a capital gain of around $170,000 if I did so.

I have also claimed depreciation deductions for around eight years from 2005 to 2011 which amounts to $31,000.

I have declared this rental income in Australia and also the deductions.

I would like to ask you whether if I sell the property, I will be liable not only for CGT in Australia but also need to pay tax on the total depreciation clawback of around $31,000.

I understand that the CGT would be 50% of the capital gain as taxable income but unsure how the depreciation clawback would be treated.

If it is added on to my Australian income, it could very well make it unworthwhile to sell in the first place.


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