Asset Planning

Identifying the most tax efficient and suitable tax structure requires taxation, estate planning and asset protection considerations.

There are various ownership structures that a taxpayer can use to hold rental properties, undertake property development, property investment or any other business activities. These include:

  • Sole/direct ownership,
  • Companies, including look through company,
  • Joint ventures,
  • Partnerships, including limited partnerships, and
  • Trusts.

To determine the most tax efficient and suitable tax structure, background facts, short- and long- term business plans and personal plans of the taxpayer should be considered.

We understand, lawyers and accountants may have different objectives and intentions when determining the appropriate structure for the taxpayer. For instance, lawyers may aim to maximise asset protection and estate planning, whereas accountants may aim to maximise tax efficiencies in a structure. At NZ Tax Prop, we will consider the appropriate structure for you with your lawyer or our recommended lawyers to ensure all objectives are met!

Factors To Consider

The appropriate ownership structure should be tax efficient, set up to achieve your financial and personal goals and protect your assets. Questions that need to be considered when selecting an ownership structure include:

  • Is the taxpayer undertaking the activity by themselves or others?
  • Is change of ownership anticipated?
  • Where does the taxpayer want future income and capital gains to be located?
  • Does the proposed structure provide asset protection required by the taxpayer?
  • Does the proposed structure allow for income generated from the property to be taxed at less than 33% (or 39% after 1 April 2021), or distributed to related taxpayers on a lower marginal tax rate?
  • Can financial costs associated with the purchase be deducted for tax purposes? Can any losses incurred be offset against other income?
  • What degree of control can the taxpayer exercise over the entity that owns the property?
  • Are the formation and ongoing costs justified against the proposed structure?
  • Is the taxpayer undertaking the activity by themselves or others?
  • Is change of ownership anticipated?
  • Where does the taxpayer want future income and capital gains to be located?
  • Does the proposed structure provide asset protection required by the taxpayer?
  • Does the proposed structure allow for income generated from the property to be taxed at less than 33% (or 39% after 1 April 2021), or distributed to related taxpayers on a lower marginal tax rate?
  • Can financial costs associated with the purchase be deducted for tax purposes? Can any losses incurred be offset against other income?
  • What degree of control can the taxpayer exercise over the entity that owns the property?
  • Are the formation and ongoing costs justified against the proposed structure?

As taxpayer’s circumstances are different, detailed analysis of each individual is required before an ownership structure can be recommended.

Need Help With Deciding And Forming The Ownership Structure?

Please refer to our people for more information on who we are, our experience and how we can help.

We offer a no obligation 30min free consultation where we can discuss:

  • your current tax situation and position;
  • what ownership structure options are available to you;
  • highlight tax issues and opportunities; and
  • how we can add value and assist.
Book a Consultation