Comments around Capital Gains
Question from Andrew updated on 3rd August 2009:
Our expert Mark Withers responded:
No lack of comment from me Andrew, see my letter to the editor published in the Herald last month that went to print with the heading "Taxing Property is a Political Trap" In all seriousness though, we simply don't know yet what is comming. Change is clearly in the wind but the tax working group hasn't even presented it's findings to government yet so we are a long way from seeing what the government will adopt. Even further away from looking at tax planning measures.
Capital gains tax and ring fencing seem now to be further down the list of possibles than land tax or chopping back of depreciation allowances. Whilst I accept knowbody in property wants anything to change it might be a case of having to accept something and I for one would breath a sigh of relief if they don't ring fence tax losses and don't introduce CGT. Remember with CGT though that it is potentially far wider than just property it could well apply to shares and other assets too. Even land taxes have huge political problems, would you levy them on farms? How about land that has been passed to tribal interests as treaty of Waitangi settlements? The challenges are large. The only positive is the promise to reduce the high marginal tax rate at the same time which would be a welcome move for many. Only time will tell and I suspect you can rest assured there will be plenty more comment as the proposals develop.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.