Most people are aware that from 1 October 2015, residential property (with some exceptions) that is bought and sold within a two-year period will attract tax payable on capital gains made. This rule will apply to equally to individuals, companies and trusts.
If a property has been owned for more than two years by a trust, or if the property is your main home, this new rule will not apply. Solicitors, however, are going to have to file a report with Land Information New Zealand in order to actually settle the transaction.
This means that if a trust is going to buy or sell a property after 1 October 2015, the trust is going to need an IRD number. Accordingly, if you do not know the trust's IRD number and the trust is intending to buy/sell a residential property, please let us know. This will enable us to provide you and your solicitor with the trust's IRD number or if necessary, make an application on behalf of the trust for an IRD number.
A word to the wise: don't leave this to the last minute. If the IRD are inundated with requests, they may not be able to issue an IRD number immediately, which could delay settlement.
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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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