Change in circumstances forces restructure
Question from Suzanne updated on 24th February 2011:
Our expert Mark Withers responded:
One thing for sure and that is that the Foxton property should not remain in the LAQC if you wish to make it your home again. IRD have been on the warpath for some time looking for these types of ownership arrangement. You will need to sell it out of the company at market value.
Given you already have a trust it probably makes sense to use the trust given it was established to protect your personal wealth. With gift duty set to be removed in october the trust may well be best. If you have depreciated the Foxton property a depreciation recovery will be triggered as a result of the sale from the company.
I suggest you try to complete the transfer so that the company can become dormant before all the tax changes affecting LAQC's come into effect from 1 April.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.