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 efficiency for landlord-tenants

Anna asks:

I have moved out of my house and a tenant lives in it. I had to move to find work. Now I am a tenant myself and a landlord. I pay more rent than I collect. I am doing my tax return. How can I make this situation work for me?

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Rental transfer to LC

David asks:

I have seen the various answers with respect to transferring rentals to LTC, but I would like to ask it from a different approach.

My wife and I have a couple of rental properties acquired a number of years ago, and did not at the time set up a company for them. (This was about 20 years ago, and we were both overseas). Now we are back in the country and we are looking the possibility of moving the rental properties to a Limited Company (not a LTC).

The aim of this is to make tax reporting easier, to clarify the tax structure, and to provide a future platform for more investment purchases in the future. But would the IRD see this as tax avoidance, as we are not looking at the LTC setup to pass losses (if there are any) on to our own income?

We would be selling them to the company at the value that would cover the current mortgages on them and to cover the historical deprecation on those properties

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Lack of IRD knowledge

Fern asks:

I have a rental property and I have only just discovered that I should be declaring this income with IRD. I never classed it as an income as it has cost me money every year. I have investigated everything and I have fully completed my own tax returns for the last six years. What advice can you give me on how I approach the IRD about this? Do I need to write a letter explaining my lack of knowledge? What is the best approach?

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