Which is the best option Trust/LAQC?
Su asks:
(updated on Thursday, November 18th 2010)
Our Experts Answer:
*This answer was correct at time of answering, 24th May, 2010
Because the interest on the money you borrow to buy your new home is not deductible against the rent from the old one you may like to consider a restructure. Traditionally this would be done by selling the old home to an LAQC that borrows to buy it.
The LAQC regime is being changed though and these companies will be taxed as flow through entities in future. There will be limitations on the amount of loss that can be claimed, capped at the level of a shareholders economic interest in the company. This may not be too problematic because the LAQC bank debt guaranteed by the shareholders will probably be included in the calculation of their economic interest.
Changes in the shareholding of the company will also trigger the tax consequences of disposal of the companies underlying property asset which will reduce the flexibility currently on offer with the LAQC regime. It may well be appropriate to structure your new private residence in a trust for asset protection & estate planning reasons.
Heartland Bank - Online | 6.69 |
SBS FirstHome Combo | 6.74 |
Wairarapa Building Society | 6.95 |
Unity | 6.99 |
Co-operative Bank - First Home Special | 7.04 |
ICBC | 7.05 |
China Construction Bank | 7.09 |
BNZ - Classic | 7.24 |
ASB Bank | 7.24 |
ANZ Special | 7.24 |
TSB Special | 7.24 |
Unity First Home Buyer special | 6.45 |
Heartland Bank - Online | 6.45 |
China Construction Bank | 6.75 |
TSB Special | 6.75 |
ICBC | 6.75 |
ANZ Special | 6.79 |
ASB Bank | 6.79 |
AIA - Go Home Loans | 6.79 |
Kiwibank Special | 6.79 |
BNZ - Classic | 6.79 |
Unity | 6.79 |
Westpac Special | 6.39 |
China Construction Bank | 6.40 |
ICBC | 6.49 |
SBS Bank Special | 6.55 |
Kiwibank Special | 6.55 |
BNZ - Classic | 6.55 |
Co-operative Bank - Owner Occ | 6.55 |
ASB Bank | 6.55 |
AIA - Go Home Loans | 6.55 |
TSB Special | 6.59 |
Kainga Ora | 6.99 |
SBS FirstHome Combo | 6.19 |
AIA - Back My Build | 6.19 |
ANZ Blueprint to Build | 7.39 |
Credit Union Auckland | 7.70 |
ICBC | 7.85 |
Heartland Bank - Online | 7.99 |
Pepper Money Essential | 8.29 |
Co-operative Bank - Owner Occ | 8.40 |
Co-operative Bank - Standard | 8.40 |
First Credit Union Standard | 8.50 |
Kiwibank | 8.50 |