Hi all
i just want to clarify something that i’ve been reading on some websites. This is that there is no Capital Gains Tax payable in NZ.
while this is true for NZ resident tax payers its not true for Ausie investors. Sorry guys you will be expected to pay tax in australia.
regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
Hey westan,
Shouldn’t that read “0%” rather than “No”? The NZ Government could easily increase this from 0%.
— MJ.
If you are investing in new zealand you need to establish the correct structures there may some protections. After all capital gains tax is a tax on profit. It is not about avoiding tax but being able to leave it in New Zealand
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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Hi nigel
i’m aware that a few people are using some form of NZ Trusts to buy properties, this maybe one way of keeping the money in NZ, i’m not sure as i haven’t needed to investigate them. One risk is you have to hand over control of your assett (money) to NZ based directors.
however like i said if the entity is an australian one then you will need to pay CGT.regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
Originally posted by westan:if the entity is an australian one then you will need to pay CGT
And if the entity is a NZ one, with NZ trustees or directors, then you may still need to pay tax in Australia.
GP
Hi Guys,
I just want to make some general comments here as this topic could open up a can of worms if you know what I mean!!. Westan’s right, Nigels right, GP is right in a way!
One main difference between Australian Trust and NZ one is that the residency tax status of a NZ trust is determined by the Settlor whereas in Oz its determined by the trustee. So if your Lawyer is a kiwi an acts as the settlor in NZ, then its a NZ trust.(short version)
Now GP Let’s take the case whereby you setup a NZ trust with nZ company trustee with foreign directors(from OZ), something similiar to my structure.Let’s say you kept all the profits and CG in the trust and never distributed it and paid about 30% tax on it because your accumalating it in the trust. What would stop you from going over to NZ for 6 months or so, where you automatically become a NZ resident and then distributed to yourself as a NZ resident. You could do it this way. If its a small sum, its probably not worth doing as my Australian accountant said, however if its a large sum like 100k, then I would live their definitely, why not a beautiful country is it not??
Of course if you didn’t do this and just bought the money over, then your right because the directors have Aussie tax resident status and not NZ, you bring back 100k and lose half to the ATO.
Just my thoughtsRegards
Chef
Hi all
Chef you said
What would stop you from going over to NZ for 6 months or so, where you automatically become a NZ resident and then distributed to yourself as a NZ resident. You could do it this way. If its a small sum, its probably not worth doing as my Australian accountant said, however if its a large sum like 100k, then I would live their definitely, why not a beautiful country is it not??I moved to NZ in Dec 2003 to enjoy the country and to invest, but one thing my accountant here (in NZ) was very careful to establish is what country am i a tax resident of. According to him the fact that i was living in NZ for 6 months was not the only consideration. He asked me heaps of questions that he said the NZ tax office could ask in establishing my tax residency status. The fact that i was living in NZ was only part of it. He asked what was the situation of my home back in OZ , and many other questions. The fact that i had moved out and was clearly here for more than a short term holiday made him comfortable that i was a true NZ tax resident.
Just raising some issues that would be worth considering if someone wanted to go down the Move to NZ short term path.regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
Het Westan,
Completely agree with your comments and I hope others take note. Just staying their bumming around, may get you into trouble. I’m sure theirs plenty of chef jobs over their for me to take part in while I visit my properties and hopefully buy more or even spot for Mini. God knows I have worked with many kiwi chefs here that have worked under me and qualified to become Oz residents. So I’m glad you have raised that point!
Regards
Chef
Hi Guys,
Just a few things to add to this. Investors should not worry to much about control of assests while using a NZ based complying trust. The way it works ( in a nutshell) is that you have absolute discretion (hopefully) to appoint or change trustees whether this be a corporate trustee or not. As well the NZ shareholders of the corporate trustee will have limited or no voting rights. So effectively no decision can be made without you.
The issue of residence for individuals or otherwise goes far beyond where you reside as others have said. Best to seek professional advice on this ( was about to try an explaination ) Although this area is straight forward the provisions are extremely detailed and I would hate to create confusion.
Cheers
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Don and Liz are correct. We used an international tax consultant to work out the best structures we then use a very good accountant to put it into place. You still pay tax but it gives you more options when you sell
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
service and seminarsNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
you’re absolutely right!
i have found a way around it, but it involves using a nz local as the majority stake holder in a nz company. even then my accountant cant tell me for 100% certain whether i will get away with it.
cheers
shaunLead, Follow or get out of the bloody way
Just a few things to add re capital gains tax and the local buzz around at the moment.
As some of you know election time is looming in nz and parties are talking about the possibility of a capital gains tax for kiwis who own foriegn assest ie kiwis who own homes in OZ and shares etc.
Initial discussion has indicated that this should place positive pressure on the price of local assest, ie increase demand for local (tax exempt real estate and stocks etc. Time will tell.
This mornings business report stated that the market has started to factor in a rate cut early in the new year or later this year.
The NZ dollars is moving lower against the majors so it will be interesting to watch currency movements over the next few days/weeks.
Cheers.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Hi all
i agree with Don.
yes the Kiwi Dollar is taking a HIT of the past month. Great for people wanting to invest in NZ. Not good for those wanting to take the money home[bawl].
I agree with you there is a real chance that interest rates will lower which will be great for all investors. It was NZ very high interest rates that turned some cash positive deals in neautral returns. These should become positive again if the interest arte reduction is decent.
regards westan
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dont forget about depreciation payback, if you sell a house for more than you bought it for you have to pay back out of the gain the depreciation you have claimed over the period of ownership
when the going gets weird the weird turn pro
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