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Sell LTC to family trust

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  • Sell LTC to family trust

    If I want to have family trust to own LTC, do I just transfer/sell the shares from LTC director to a trustee?

    I am the director of the company and I am also a trustee of my family trust....
    Last edited by SleepyTiger; 22-06-2016, 05:48 PM.

  • #2
    What value? The current shareholder will need to sell the shares in the LTC at fair market value. There are other things that follow on from this too.

    Is there a deemed sale and depreciation recovered?
    Is there a deemed sale and you are associated to trader, building, developer? If so gains could be taxable

    Has LTC purchased since new 2 year bright line test, and could this shareholder change trigger tax?

    I would suggest you get full advice from your accountant!

    Ross
    Book a free chat here
    Ross Barnett - Property Accountant

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    • #3
      Hey Ross,
      Let's not worry about all of above.

      I would like to know, to have Family trust own LTC, do I just transfer shares from directors to trustees? In this case, complete a share transfer form to sell from LTC directors (Me+others) to the trustee (me) ?

      Comment


      • #4
        If you log into the companies' page (where you file your annual return) there's a mechanism for changing the shareholding of the company. I recently did this because I assumed (perhaps incorrectly?) that if I could gift other assets into the Trust, I could gift the shares.
        I didn't have to worry about depreciation clawback, either.
        My blog. From personal experience.
        http://statehousinginnz.wordpress.com/

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        • #5
          The company office is merely a record of transactions, it is not the legal transaction itself.

          So still need signed documents, such as a share transfer form.

          Sidinz - so you still need share transfer form, work out fair market value and then gifting documents

          Ross
          Book a free chat here
          Ross Barnett - Property Accountant

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          • #6
            Gifting documents? Even though there's no longer an annual limit?
            My blog. From personal experience.
            http://statehousinginnz.wordpress.com/

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            • #7
              I think Ross answered your question in post #5.

              FYI, you're being a bit rude.

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              • #8
                My apologies, I was not intending to be rude - I have deleted my previous post.

                I know I need a transfer form and I am not worried about any implications as the result of the sale.

                My question is "do I just transfer shares from director to trustee ? " Thanks.
                Last edited by SleepyTiger; 22-06-2016, 11:59 PM.

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                • #9
                  You transfer from shareholder to shareholder. Directors aren't necessarily shareholders (but I take it from your post that the directors and shareholders are the same people/person). So yes in that case, from director/shareholder to trustee (not to the trust name, to the trustee)

                  Then there's the administrative and tax details of doing that.

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                  • #10
                    Thanks Ivan,
                    I got it now, transfer from shareholder of the LTC (in this case myself xx% plus others xx%) to Trustees of the Trust (Trustee 1 + Trustee 2 + Professional Trustee 100%).

                    & Thanks all to who replied eariler , if my tone sounded a bit frustrated in the previous posts I apologies.

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