How do I offset property tax if I move to Australia?

Question from Raghav updated on 31st October 2008:

Hi, I currently own 2 investment properties in my LAQC in NZ. I am receiving a tax benefit on them by claiming losses against my personal income in NZ. Would i get the same tax benefit if I move to Australia or will I have to forfeit it completely? Can you suggest what I should do as I may be moving to Australia in the near future. Thanks.

Our expert responded:

Tax losses in NZ can only be offset against NZ income, so you will not be able to offset your LAQC tax losses against your Australian income.  Also, if you become an Australian tax resident, you will have to get your LAQC audited and you will be subjected to Australian tax law including capital gains tax.  You will either need to put up with this, depending on how long you are going to Australia for, or sell your properties from the LAQC to a properly structured trust at market value, taking the hit if there is a depreciation recovered issue.

Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth.  She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies. 


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