Capital Gains Tax? Keep related posts in this thread, please.

[speights boy]

Some Apples and Oranges in there Wayne.

GROWTH: yes, pouring earnings back into a business EG: Ryman.

A residential property equivalent could be something like doing renovations, or building a sleepout.
Of course it will then sell for a higher price.....GROWTH.

That is different from buying, doing nothing, and then selling for a higher price.

[spaceman]

To be safe what I'm going to do for each new purchase from now on is draft a short business case crunching the numbers and showing the cashflow and justification for purchase on grounds other than capital gain after re-sale (I do this anyway just normally don't record it); As I only buy good yielding property that does not rely on cap gains this is no problem for me. I will get it signed (witness/justice of peice/will need to look at what I need to give it the correct authority, any ideas?) and stick it in my property file in case it's ever needed (i.e if I end up selling later for any reason what so ever).

Absolutely not an issue for most real property investors on here I'd imagine

Only urban myth ....but I've been told that this could be counter-productive..... the premise being that going to such lengths to prove your intent actually raises a red flag

IMHO......No matter what paper work is signed nobody can prove intent.

I believe when it comes down to it IRD know they can't prove intent one way or the other so they move on to looking for a pattern. ...ie: once you can pretty much get away with anything, but once you get to 11-12 like that case recently you're pretty much stuffed no matter what kind of reasons/intentions you can come up with

Cheers
Spaceman

[speights boy]

I believe when it comes down to it IRD know they can't prove intent one way or the other .......

They don't need to; the taxpayer does.

[marklowes]

Only urban myth ....but I've been told that this could be counter-productive..... the premise being that going to such lengths to prove your intent actually raises a red flag

IMHO......No matter what paper work is signed nobody can prove intent.

I believe when it comes down to it IRD know they can't prove intent one way or the other so they move on to looking for a pattern. ...ie: once you can pretty much get away with anything, but once you get to 11-12 like that case recently you're pretty much stuffed no matter what kind of reasons/intentions you can come up with

Cheers
Spaceman

I would say that 'proof' means balance of probabilities (not without doubt), and from what I've heard the IRD can suspect and ask you to show evidence, at this point the onus is on you to provide evidence that on the balance of probabilities your intention in buying the property was not so you could then sell it at a profit. So in effect, by the time they come knocking, they dont have to prove anything. It's you that has to show the proof.

I think if I showed evidence showing cash flow from day one, with a business case based on cash flow, prehaps comparing it to the bank interest rates at the time, and a statement indicating the intention for buying was to benefit from the cash flow premium over bank interest rate, then they couldnt touch me.

[marklowes]

"The civil standard of proof is widely understood to require facts to be proved on the balance of probabilities, or shown as more probable than not. In crude mathematical terms, this might be described as meaning that the party whose case reaches a probability threshold of at least 51 per cent will meet the required standard of proof."

Source: D Hamer “The Civil Standard of Proof Uncertainty: Probability, Belief and Justice” (1994) 16 Syd LR 506 at 509.

[spaceman]

I would say that 'proof' means balance of probabilities (not without doubt),

Dude!!!!!!....hate hate hate.....balance of probabilities my a$$....proof is PROOf!!!!!!!!

proof
1.evidence sufficient to establish a thing as true, or to produce belief inits truth.
2.anything serving as such evidence:What proof do you have?


3.the act of testing or making trial of anything; test; trial:to put a thing to the proof.


4.the establishment of the truth of anything; demonstration.

5.Law. (in judicial proceedings) evidence having probative weight.

6.the effect of evidence in convincing the mind.

7.an arithmetical operation serving to check the correctness of a calculation.

http://dictionary.reference.com/browse/proof

Love you bro....but 51% my @$$







That being said.... I did state at the start of my earlier post .........Only urban myth.....................So i honestly don't know if it's true ore not. But it sounds reasonable to me that if somebody goes to extreme lengths to give you assurances then they in themselves become a bit of a red flag.

and from what I've heard the IRD can suspect and ask you to show evidence, at this point the onus is on you to provide evidence that on the balance of probabilities your intention in buying the property was not so you could then sell it at a profit. So in effect, by the time they come knocking, they dont have to prove anything. It's you that has to show the proof.

I was in the army and am a returned serviceman...I have a friend who was/is the same...that friend is now an investigator with the IRD....we are brothers on a level that most people will never understand......what you say above is not the same message that I get from him....he could be bullshitting me of course....nothing old army buddies like better than bullshitting each other.

I think if I showed evidence showing cash flow from day one, with a business case based on cash flow, prehaps comparing it to the bank interest rates at the time, and a statement indicating the intention for buying was to benefit from the cash flow premium over bank interest rate, then they couldnt touch me.

If you showed a pattern of selling properties for a profit, I'd bet they could touch you in a most unpleasant manner..........a bad touch if you will.


No real hate intended .....I have no proper evidence on way or the other just my own opinion and stories an old army buddy who now works for the IRD tells me.

Good luck

Cheers
Spaceman

[marklowes]

Dude!!!!!!....hate hate hate.....balance of probabilities my a$$....proof is PROOf!!!!!!!!



Love you bro....but 51% my @$$







That being said.... I did state at the start of my earlier post .........Only urban myth.....................So i honestly don't know if it's true ore not. But it sounds reasonable to me that if somebody goes to extreme lengths to give you assurances then they in themselves become a bit of a red flag.



I was in the army and am a returned serviceman...I have a friend who was/is the same...that friend is now an investigator with the IRD....we are brothers on a level that most people will never understand......what you say above is not the same message that I get from him....he could be bullshitting me of course....nothing old army buddies like better than bullshitting each other.



If you showed a pattern of selling properties for a profit, I'd bet they could touch you in a most unpleasant manner..........a bad touch if you will.


No real hate intended .....I have no proper evidence on way or the other just my own opinion and stories an old army buddy who now works for the IRD tells me.

Good luck

Cheers
Spaceman

Didnt mean to stress you out!

I never intend on selling any of my properties, but if the IRD are getting millions of dollars more to play with and probably targets set for number of people to catch, I don't want to take any chances if the time comes to offload some properties in the future. Obviously if no sales actually occur then no cap gains are realised so the question can never be asked.

And when it comes to civil proceedings in a court (IRD vs. You), the definition of proof is what I mentioned in my last post, not what the dictionary says.

[Glenn]

Dude!!!!!!....hate hate hate.....balance of probabilities my a$$....proof is PROOf!!!!!!!!


Spaceman

Well my IRD experience which is limited to two cases.
In one case they asked me to come to Wellington to appear at the tax case instead of having the hearing in Nelson. They promised to pay my airfares. They did not honour that promise and never paid me.

Then a decade or more later. I had a massive tax case involving 40 other people. The advise from IRD was to pay and then ask for the refund. Other wise you will be asked to pay three times what you might need to pay. The IRD comment when trying to claim it back was you prove you did not need to pay. They said if you paid you must have thought you owed the money.
Proof with the IRD is different from other courts. With them you are guilty until you prove other wise. If you think you are so smart then we will use the power and resources of the state to cripple you financially until you have no blood left. Just pay and shut up or we will get you.

[spaceman]

Didnt mean to stress you out!

I never intend on selling any of my properties, but if the IRD are getting millions of dollars more to play with and probably targets set for number of people to catch, I don't want to take any chances if the time comes to offload some properties in the future. Obviously if no sales actually occur then no cap gains are realised so the question can never be asked.

And when it comes to civil proceedings in a court (IRD vs. You), the definition of proof is what I mentioned in my last post, not what the dictionary says.

LOLZ...not stressed out...thought I made that clear with ......No real hate intended ....

I strongly disagree with what you're say about proof and court cases though....specifically to do with the IRD......how many IRD investigators have you known for more than 25 years?????

Cheers
Spaceman

[marklowes]

IRD don't make the calls on proof though, the courts do. And the courts use balance of probabilities in civil proceeding.

Maybe your point is that in your experience/knowing an investigator, the IRD don't go after you unless it's very clear your intention was to resell for profit?

Which is a different point to what I'm making.

What I'm saying is IRD could potentially use current law settings to go after A LOT more people and most likely get them to.

You're saying IRD haven't (i agree) and won't (remains to be seen) do this. I hope you're right.

[Happi]

New Rules OCT 2015 - do they effect family home subdivisions?

Hi PT People,

Can you help me understand if the proposed new rules will have an impact on my example below?

The rule about holding a non-personal-home (i.e. rental or trade) for at least 2 years before selling it, or else being liable for tax and gst on any 'profits' made (I know the rule is not yet fully clarified).

WHAT IF I build or relocate a house onto my family home/backyard and subdivide it and sell it as soon as its ready? A couple of years ago I was told that it would not trigger any tax or gst issues because we had bought the property as a family home, and have been living in it for all these years.

Don't know who can really answer this question... any help is welcome.

Thanks!

[speights boy]

Does the example on page 8 in this presentation cover your situation ?

http://www.interest.co.nz/sites/default/files/embedded_images/Bright%20line%20slides.pdf

[Happi]

Does the example on page 8 in this presentation cover your situation ?

http://www.interest.co.nz/sites/defa...e%20slides.pdf

WOW! THANK YOU! This is very heartening :-)

[Wayne]

Does the example on page 8 in this presentation cover your situation ?

http://www.interest.co.nz/sites/defa...e%20slides.pdf

Except that was about buying land.
Maybe the land having a house on it and subdividing is the same since it is the land you are subdividing.
I would have thought that the profit from the house you put on it would be taxable even if the land wasn't.

[speights boy]

More details on the coming capital gains tax on property

A couple of weeks ago, tax officials released an issues paper following up on the "bright-line" test that was announced in the Government Budget in May. The paper provides greater detail about how the new rules are intended to work. They will apply to property acquired and sold from 1 October 2015.

http://www.stuff.co.nz/the-press/bus...ax-on-property