SearchIf I rent from my LAQC, what are the tax implications?
Simon asks:
(updated on Thursday, November 20th 2008)
Our Experts Answer:
A possible issue with your plan is that IRD could consider this tax avoidance simply because of the connection between you and your mother and the fact that you are getting a direct tax benefit. To get around this issue, your mother could set up a trust to buy the property instead of the LAQC. The tax benefits are the same, although they are deferred until such time that the property is in a profit making position. In a situation such as this, it is important that you and your mother see an accountant to ensure you get advice specific to your situation and ensure you are both protected.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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