What is the best way to structure assets if subdividing a section?

Our Experts Answer:

The work you are contemplating doing definitely falls within the act of developing and therefore tax is payable on any profit. The only way to avoid being tainted is to set up a special purpose trading trust. It is not too complicated, and in fact, this is exactly what should be done in order to minimise the risk of different activites impacting on other activities. You should be aware though that the whole concept of tainting is under review at the moment by IRD and while no actual legislation has been proposed, there could be changes coming. However, under our current rules, you would need to use a special purpose trading trust for a transaction such as the one you have described.

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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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