Greetings all.
I have recenlty come over from NZ and have two properties in NZ structured as LAQC’s (Loss attributing Qualifying companies). Great structure if you are living in NZ but a nightmare if you move to Aussie. Apparently I have to pay 10% RWT on the interest I pay to NZ banks to the AOT!. Secondly if I sell the properties the capital gain will need to be distributed to me as a dividend (if I wind the companies up) and is therefore taxable (great stuff) thirdly if i keep them and return to NZ after five years I have to pay CGT as the AOT deems that they are disposed of (gets better ah!)So before I get totally disgruntled is anyone else in this boat or does anyone know of any books written about NZ nvestmenst from an Aussie tax perspective?.
Thanks[bomb]
I am interested to know where you got this advice – and whether you have an accountant willing [or able] to find a solution.
Firstly, you need to speak to a qualified and motivated accountant – someone with knowledge and experience in cross border tax issues [btw NZ and Australia], and a lawyer who can advise on the appropriate company structure.
A LAQC [which is a standard company type] is only beneficial if you plan to offset losses against future income, but it may not be the best structure now that your circumstances have changed.
1. There is a way to avoid paying 10% resident withholding tax to the AOT.
2. You should not have to pay capital gains on income derived and remaining in New Zealand under the appropriate structure.
3. I have never heard of having to pay CGT [in the country you now reside in] on assets acquired and retained in another country when you return to that country. Maybe because my accountant has found a way around this.
In a nutshell, forget looking for books on the subject. If you are concerned about the financial ramifications, seek “professional” advice.
— Michael
You must realise that a company is a separate entity in its own right and is taxed accordingly
Apparently I have to pay 10% RWT on the interest I pay to NZ banks to the AOT!.This sounds a bit unusual. You pay tax and RWT on income not expenses.
An LAQC works if you have other personal income and you can offset losses but this must be done in the year they occur. If reverting back to a closely held company, losses can be accumulated and carried forward to be offset at a later date.
If your company produces income, the company is taxed. The shareholder is only taxed on the dividends and income passed on to it from the company. Hence being a non resident shareholder you would be taxed NZ non resident withholding tax on your dividends and then taxed in Australia. But this is only on the dividends paid to you not on the whole lot.
Remember that a company must have a resident director. So why don’t you just keep the company and convert from LAQC
There are a number of Australian Accountants on this forum, I suggest you contact one of them. Your information doesn’t appear to be correct.
Cheers
JeffThanks Michael and Jeff. Yes the info we rec’d does seem dodgy but it was from an accountant who works for one of the big 4.
Can either of you suggest an accountant who is knowledgeable on cross border tax issues?
cheers
Originally posted by swinys:Can either of you suggest an accountant who is knowledgeable on cross border tax issues?
Not in Australia, but one I had recommended to me in Auckland is Chris Raynal at Master Accountants:
http://www.masteraccountants.co.nz
He used to be a CPA in Australia specialising in property before moving to NZ a few years ago (so he said in his response to my email).
I haven’t used him yet, but am seriously considering doing so if I buy property in NZ.
GP
Go to the members section and try contacting Julia on this foum. She has provided some pretty informative answers in the past regarding Australian Tax issues.
Worth a try anyway.
Cheers
Jeff
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