How can I take advantage of money left in a will?

[Fuzzywuzzy]

Hi to you all.

I have just been left a sum of money in a UK will. My wife and I have a family trust set up which we have put our family home into for asset protection. The money was willed to me in my own personal name not the Trust.

We are property investors and have a Look Through Company (LTC) for our rental property. We are looking to add to our portfolio and have bank finance available.

Within this tax structure, is there any way in which I could take advantage of this situation to maximise future financial returns?

Thanks for any replies in advance.

[spaceman]

Buy an IP in the UK and enjoy tax deductible trips to the UK.

Cheers
Spaceman

[Keithw]

Great minds think alike !
Thats pretty much what I was thinking, it doesnt seem to make much sense to bring Pounds to NZ with the current exchange rates.
A UK property would certainly need to be part of any calculations of what to buy.

[drelly]

You guys are so dodgy!

It's not quite that simple. Yes, a trip to the UK would be deductible - Partially! You'd need to keep records of how much time was spent attending to the property and then claim that proportion of your travel expenses.

[Keithw]

No argument there Drelly, there wasn't any implication from me that it would be otherwise.
Must be your naturally dodgy mindest

[spaceman]

You guys are so dodgy!

It's not quite that simple. Yes, a trip to the UK would be deductible - Partially! You'd need to keep records of how much time was spent attending to the property and then claim that proportion of your travel expenses.

Amateur!!!!..... have a look at the NZ tax laws .... you don't have to to keep track of your time in the way you imply at all.

EG .... Fly to UK on Wed via Dubai ...overnight somewhere nice traveling is such a chore .... arrive London Friday ....weekend free to recover ....meeting Monday with UK accountant .....meeting Tuesday UK property manager .... Wednesday visit property .... Thursday/ Friday spend an hour or so each day investigating UK property scene prospecting/feasibility studies for new purchases ...weekend free ... Monday travel back to NZ overnighting somewhere nice ... arrive back in NZ on Wed.

End result 2 weeks out of NZ all expenses claimable.

The same of course applies in NZ..... if I travel from Wgtn to Akl on Friday and have a business meeting on Monday with my Akl based accountant and return to Wgtn on Tuesday it matters not that the % of time spent on actual business might be small the expenses for whole trip is claimable ...... there is absolutely no rule that states you must "work" 8 hours per day to be able to deduct expenses.

When I was living overseas and returning to NZ from time to time I was claiming 100% of my expenses while in NZ, including airfares, accommodation, food, cars etc etc and had all of my claims accepted even though I was obviously not working 100% of the time. I did however ensure that I "worked" every business day.

Cheers
Spaceman

[Perry]

There & Back

I do agree with Spaceman. Last I was told
about such a situation, there was no need
to apportion international travel costs when
going o'seas on business, even if two weeks
holiday was an add-on. Nothing in those two
weeks was deductible, but the full cost of
the overseas travel certainly was.

[drelly]

I had a quick look and found this guideline saying to keep records of business and non-business activity. Couldn't find anything that explicitly says how a claim should be calculated but it clearly mentions "portion" and "time spent", so like many expenses, it's a matter of what you believe is reasonable and defendable!

http://www.ird.govt.nz/business-income-tax/expenses/travel-exp/

Travel expenses

If you spend time travelling as part of your business you can claim business travel as an expense. A good way to prove the business portion of your travel expenses is by keeping a diary of your travels.

In addition to invoices and tickets you should also keep details of:

the reasons for the trip
the date of the trip
your itinerary
the cost of car hire, and air, bus and taxi fares
the cost of accommodation, meals and incidentals
the time spent on business and non-business activities.

[jimO]

I do agree with Spaceman. Last I was told
about such a situation, there was no need
to apportion international travel costs when
going o'seas on business, even if two weeks
holiday was an add-on. Nothing in those two
weeks was deductible, but the full cost of
the overseas travel certainly was.

it worked for Rodney Hyde

[Perry]

Would 'sleeping' time need to be declared? The IRD always, but always,
err on the side of idiocy. Several years ago, accountants were telling
clients to keep logs for business vehicles, on a one-year-in-five basis,
just to be sure. How many did that? And of those who did, how 'real'
were the log details? They were held by the accountants (supposedly),
in case the IRD asked.

That farce has never been mentioned since. I suspect that it's designed
by the IRD to spook people, more than anything else.

I believe that the apportionment of travel expenses has been adjudicated
upon, in favour of the taxpayer, as a general rule, for o'seas travel costs.
I was once given a number (TRA Determination?) but I've long since lost it.

[Perry]

it worked for Rodney Hyde

Hyde? Or his "accompanying person?"

[spaceman]

I had a quick look and found this guideline saying to keep records of business and non-business activity. Couldn't find anything that explicitly says how a claim should be calculated but it clearly mentions "portion" and "time spent", so like many expenses, it's a matter of what you believe is reasonable and defendable!
http://www.ird.govt.nz/business-inco...es/travel-exp/

portion schmortion.... here is the important bit as I see it .... straight from the IRD

If you spend time travelling as part of your business you can claim business travel as an expense.

reason for trip.... business
date of trip... only reasonable
itinerary.....not really required but I'd have no objection in providing one
cost of car hire etc .......well duh, hard to claim for stuff if you don't include the cost
time spent on business...... i'll provide this information as soon as you can show me that I am required to do so.

I'm already a property investor (this is important as prospecting work prior to being in business isn't treated the same) so if I decide that I want to go to Fiji for a week to see if I can take advantage of the political turmoil over there and pick up some IP bargains. Then even if I don't buy any and spend most of the week working on my tan since the purpose of my trip was to investigate purchasing an IP then it is a business trip and the costs are claimable.

Do you think that any property investor who traveled to Queenstown for the conference didn't claim that as a business related expense regardless of how much time they actually "worked"???


True story ......few years back I did an Instrument Landing Systems (ILS) course in the USA. Course was in two sections with a 3 week gap over xmas/new years. I had a excellent 3 weeks holiday and got up to all sorts of tax deductible hijinks

I recommend you read "Pay Zero Taxes" Chapter 8 Pages 117 - 144 "My top 10 strategies for deducting your fun" by Peter Sibbald

Cheers
Spaceman