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ASSOCIATED PERSONS TRAPS - PART 2

By Matthew Gilligan on November 20th, 2019.

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This month’s article is a continuation of last month’s on associated persons “traps”. Last month I highlighted two traps that can catch the unwary when moving property between associated entities. This month I have another two traps that readers should be aware of. 


Trap 3 – Tainting for Life
Friends, Jesse and Skylar, are 50% shareholders in a property development company called...

 

ASSOCIATED PERSONS TRAPS - PART 1

By Matthew Gilligan on November 8th, 2019.

This blog is Part 1 of 2 on traps that arise when land transactions involve “associated persons”. By way of background, both the Income Tax Act and the Goods and Services Tax Act have definitions of associated persons and special rules that apply to transactions between associates. 

Property dealers, developers and investors are often party to transactions with associated persons (e.g. restructuring ownership of existing property). 

 

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Tax Working Group - Final Report

By Matthew Gilligan on March 26th, 2019.

The Tax Working Group’s final report has been issued, and I give a quick assessment of the main points below. However, bear in mind that what the TWG have recommended and what Labour actually implement, are likely to be completely different.

Capital Gains Tax (CGT): Unsurprisingly, the TWG has recommended that a capital gains tax be implemented. Although there was disagreement amongst the members of the group, the majority are advocating that CGT apply to.....


 
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LOSS RING-FENCING QUESTIONS

By Matthew Gilligan on February 18th, 2019.

I wrote about loss ring-fencing in my December article, and it is still a hot topic. With the rules to take effect from 1 April 2019, and the legislation still not finalised, there are a number of questions that remain. I address some of these using case studies, which could well apply to you.  

But first, in case you missed my last blog, the main points from the draft ring-fencing of losses bill are.....

 
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HOT OFF THE PRESS - RING-FENCING BILL

By Matthew Gilligan on January 31st, 2019.

On 5 December 2018, the Government released the first draft of legislation dealing with the proposed ring-fencing of tax losses from rental properties. First impression on reading the Bill is that it is extraordinarily complicated and leaves questions unanswered. Here is a quick summary of the key points........


 

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My two cents on CGT

By Matthew Gilligan on November 8th, 2018.

There is no doubt the Tax Working Group’s recently released interim report is the topic du jour. Accordingly, it is only appropriate that I offer my two cents’ worth, particularly in relation to the comments on a possible capital gains tax. 
 
  • The Tax Working Group (TWG) has ruled out a land tax or an inheritance tax, but appears to me to clearly be pushing towards implementation of CGT. They have noted that it is premature to form a view without firstly determining exactly how the tax may apply, but I would be highly surprised if their final report did not support implementation of CGT.
  • The TWG is of the view that CGT should apply across assets broadly, so not restricted solely to real estate. It would also apply to shares, intellectual property, goodwill, business assets etc. The one exception to this will be the family home.  
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Bright Line Extension to 5 Years

By Matthew Gilligan on February 26th, 2018.

There are imminent changes to the bright-line test which will affect you if you are planning to buy or restructure investment property. 

You are probably already familiar with the two-year bright-line test that was introduced in October 2015. Under this test, investment property that is sold within two years of settlement is subject to tax on any increase in value. 

The Labour Government has always said they will extend this test to five years. On 15 February it was announced that the new.....

 
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2017 Economic & Property Update - Post Election Video

By Matthew Gilligan on November 27th, 2017.


Watch Matthew Gilligan and Tony Alexander as they give their post-election analysis. They discuss what is likely to happen in the economy and property market over the next 12 months, factors influencing the market, and how you can invest and profit in the current and unfolding conditions.

 
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Labour proposal to ringfence losses

By Matthew Gilligan on September 19th, 2017.

Labour has targeted investors in its housing policy released. Ringfencing tax losses, five-year bright line rules and a tax committee (to mask their desire to bring in capital gains tax) are all on their agenda......

 
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Can property prices keep rising indefinitely?

By Matthew Gilligan on April 29th, 2017.

I was recently asked whether there was an upper limit to the ratio between property price and household income, which in Auckland currently sits at about 10 to 1. In other words, the average property price is worth 10 times the average annual income.

Also known as the median multiple, this is an internationally recognised measure of housing affordability and is calculated by dividing house price by.....



 

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