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Hi There,
My friend bought a property to trade, buy and sell and make a profit and has claimed GST on the purchase.
He has now decided to keep this as his family home, or a rental to pass on to his children.
If he sells it from his GST reg trading entity to his Rental Property entity of long term holds, at market value.
Pays his GST on sale, and pays income tax on the profit (a nice tidy 48 to 54% tax for the govt).
Can he then hold this property in his rental trust as a long term rental.
With the intention of never selling.
I had a go at deciphering the Income Tax Act and thought CB 15 - Transaction between associated parties might cover it.
But it is very confusing.
Please click on the link below, Income Tax Act CB 15 – Transactions between associated persons.
Income Tax Act 2007 No 97 (as at 01 September 2022), Public Act CB 15 Transactions between associated persons – New Zealand Legislation
I am thinking once sold to a Rental Trust, and GST paid, the property can then be kept as a rental.
But just want to check in case it is passed down through the family and sold in say 20 to 50 years by them, and there was an unkown tax issue.
Cheers Albert
My friend bought a property to trade, buy and sell and make a profit and has claimed GST on the purchase.
He has now decided to keep this as his family home, or a rental to pass on to his children.
If he sells it from his GST reg trading entity to his Rental Property entity of long term holds, at market value.
Pays his GST on sale, and pays income tax on the profit (a nice tidy 48 to 54% tax for the govt).
Can he then hold this property in his rental trust as a long term rental.
With the intention of never selling.
I had a go at deciphering the Income Tax Act and thought CB 15 - Transaction between associated parties might cover it.
But it is very confusing.
Please click on the link below, Income Tax Act CB 15 – Transactions between associated persons.
Income Tax Act 2007 No 97 (as at 01 September 2022), Public Act CB 15 Transactions between associated persons – New Zealand Legislation
I am thinking once sold to a Rental Trust, and GST paid, the property can then be kept as a rental.
But just want to check in case it is passed down through the family and sold in say 20 to 50 years by them, and there was an unkown tax issue.
Cheers Albert