Hotel Apartment Sold - Need to Close Bank Account for Non Resident Investor?

[RayL]

Hi,
Me & wife, non-NZ residents bought an hotel apartment as investment, gst zero rated. The sales agent help to apply for partnership GST IRD, as well as individual partner IRD. So we have altogether 3 IRDs. We've got a NZ bank loan account set up as well. Recently I have sold my investment, with the proceeds currently deposited in the bank from which I took the bank loan. Now that I have sold my investment, do i need to deregister my gst IRD? What about the individual IRDs? Can I continue to keep the money in the NZ bank to earn interest? Or do I have to de-register all IRD and close NZ bank account because I am no more investing in NZ?
Thank you for your advice.

[eri]

have you asked the solicitor(s) who handled your purchase + sale agreements?

[Anthonyacat]

In New Zealand you're allowed to leave a bank account open if you so desire. Make sure the bank knows you're non-resident so it can deduct the correct tax from your interest.

And you're allowed to be GST registered despite not having any trading activity - but you'll need to keep filing nil returns, so might make more sense to deregister. But do speak to your accountant and lawyer first.

[eri]

presumably you registered for gst so you could avoid paying the gst upfront for the commercially managed apartment

now you've sold it and before you can deregister your gst account with ird

you'll have to pay the gst on the sale, unless the buyer has also registered for gst with ird and will continue to pay the gst on the hotel earnings

hopefully the solicitor who handled the sale has informed you of this requirement and/or already paid the deferred gst, if it was taken out of the pool

am interested in the exact details on how the gst is calculated, paid and gst number cancelled, for when we sell a hotel pool apartment

haven't looked too hard but most accountants don't seem to do this work and don't know much about it

anyone on here feel free to chime in or pm details

[RayL]

Thanks for the response.
The investment was sold to another gst registered buyer so for that part, I think it is settled. The transaction is done by lawyer and I assume it is all in order.
The question now is what do I do with my IRD #, if I can still retain these so that I can continue to leave the $ in the bank to generate interest, or I have to take the $ out of the country. I assume most countries would happy for foreigners to put money into their country. During the account opening, the bank is aware of the non-resident status, hence all interest incurred already included withholding tax deduction.
During the initial period, I engaged an accountant to help in tax matters but subsequently handled all the tax matters myself to save on cost. Hence I have no accountants or lawyer to talk to. When I asked the agent who was helping me with the sale of my hotel investment, his was non-committal, asking me to consult my accountant or lawyer. Hence I am seeking advice over here regarding the IRD issues. Thanks.

[Anthonyacat]

details on how the gst is calculated, paid and gst number cancelled, for when we sell a hotel pool apartment

Calculated at 15% - pretty simple really! To cancel GST registration you fill in an IR315 "Business Cessation" form, pay GST on any assets retained (which would be nothing, or close to, after selling a hotel pool apartment) and then you file the final GST return. The "GST Number" is never cancelled so to speak, because it is the IRD number of the entity. That number is only cancelled when the entity ceases - winding up of trust, or company, dissolution of partnership, death of individual.


The question now is what do I do with my IRD #, if I can still retain these so that I can continue to leave the $ in the bank to generate interest, or I have to take the $ out of the country.

You're allowed to keep the IRD number, and keep the $ in the bank. For reasons of simplicity it might make sense to dissolve the partnership, and just hold the money in your personal accounts. But this isn't required.


subsequently handled all the tax matters myself to save on cost......Hence I am seeking advice over here regarding the IRD issues.

The internet isn't generally seen to be a great source of advice. It's good to get a basic understanding, but the cost of taking random internet advice will likely be a lot higher than paying professional advisers!