Tax/GST/LTC Expert

Tax/GST/LTC
Ask Nick Ashford of Withers Tsang & Co questions relating to Tax and Asset Structures

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

CGT for trading only

kel asks:

If I was to partner with someone to form a property trading company (pay tax on profit), then will the rental properties I bought before under my own name be subject to tax on capital gain? All the properties I hold have been held for more than two years and I would like to keep them separate from the trading company.

 

 

 

 

 

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QC restructure

Christina asks:

We are looking at restructuring our financial affairs. We currently own an investment property in a QC. (We did not transfer it to an LTC regime as the rental generated a profit). We want to sell another rental we own into the QC. There is a mortgage on this property.

After the transfer we would expect the company to break even with no taxable income or liability. Is there any reason we should not do this given the QC regime is now archaic? Basically, we still want to make sure we can release capital gains tax free if we decide to sell one of the properties.

 

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Dealing with flatmate income

shung asks:

I'm buying my first residential property in Wellington and I need some tax advice. I'm planning to rent out a spare room in the house and get a flatmate (not a boarder) to help pay the mortgage.

I read somewhere that forming a look through company (LTC) might be beneficial in this circumstance because my intention is to get flatmates and that way I'll be able to claim tax deductions from the expenses occurred (mortgage interest, income tax from PAYE, etc).

My understanding is that as long as I apportion the expenses to the actual amount used by the flatmate (eg: dividing the power bill by two) and file this in my tax return, then this is not considered tax avoidance?
Could you please clarify whether my thinking is correct? Also, will mortgage interest be claimable as well if the property is registered as an LTC when I buy the property?

 

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