How should I structure my assets if moving to Australia?

Question from Joy updated on 12th August 2009:

Hi Mark Firstly I would like to offer my appreciation to you for your replies to various questions asked by members. Thanks for your support. I am planning to move to Australia and work & live there with my family. Here in NZ I have my own home and 1 investment property which is a rental. Both properties are mortgaged with the bank in mine and my partner's names. We are planning to sell them within next 2 years. When I move I will be renting out my home property.
I want to know :
a) Can I take Mortgage with a NZ bank and leave to Australia.
b) How to handle the tax part of NZ.
c) How to avoid paying the Capital tax in Australia.
Your reply is highly appreciated.

Our expert Mark Withers responded:

Thanks Joy, I'm glad you enjoy the Q&A.

Yes, you can maintain your NZ loans despite living in Australia, having said that, your change of circumstance is a material fact for the bank so you should meet and discuss your circumstances with them fully first.

You must continue to file an IR3NR non resident tax return in NZ accounting for your NZ derived rental income. You will only pay tax in NZ if you derive a profit. One interesting new advantage for you is that Australia has recently repealed its foriegn loss quarantining rules which should mean that the losses on the NZ properties can be offset against the incomes you derive in Australia. Previously this hasn't been possible.

As an Australian tax resident though, gains on your NZ properties may attract capital gains tax in Australia so it will be important to get some tax advice in Australia in relation to the rules that will apply to tax the NZ assets in Australia.

Kind Regards Mark

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



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