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  1. #1
    Join Date
    Oct 2016
    Posts
    196

    Default how does brightline apply if you swap property with someone?

    lets say you bought a section and then traded with another party in a swap, most likely with no money received, but i'm most likely going to have to fork money to the other party as section is most likely to be worth less than a house for example.

    all hypothetical of course.

    i would fall under brightline test, other party may or may not.

    any ideas?

  2. #2
    Join Date
    Jun 2004
    Posts
    10,426

    Default

    Quote Originally Posted by jack2016 View Post
    lets say you bought a section and then traded with another party in a swap, most likely with no money received, but i'm most likely going to have to fork money to the other party as section is most likely to be worth less than a house for example.

    all hypothetical of course.

    i would fall under brightline test, other party may or may not.

    any ideas?
    deemed sale so yes.

  3. #3
    Join Date
    Oct 2016
    Posts
    196

    Default

    thanks again

  4. #4
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,628

    Default

    From tax perspective and legal perspective you are selling and then buying again. So could be subject to Brightline rules, and/or GST or other taxing provisions.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  5. #5

    Default

    Does brightline still occur in the case of matrimonial property division? For example there are 10 properties in joint name and then when a financial division is affected each person becomes the owner of 5 properties outrightly. One property being a recent purchase.

  6. #6
    Join Date
    Oct 2013
    Posts
    1,634

    Default

    Quote Originally Posted by mrsaneperson View Post
    Does brightline still occur in the case of matrimonial property division? For example there are 10 properties in joint name and then when a financial division is affected each person becomes the owner of 5 properties outrightly. One property being a recent purchase.
    Bright Line would not apply to the transfer as part of a relationship break-up.

    However, I believe that the bright line date may then be reset to the date of transfer so it would apply to any gains in the subsequent 5 years, if sold during that period. I'd need to check that last bit though if I ever came up against it, as it doesn't seem fair.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.


 

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