In particular land sales and being associated with a person in the business of erecting buildings.
Example: Trust is set up for Mum, Dad (neither in the property game nor in the business of erecting buildings) and children. Trust buys rental property. Children grow up. Child 2 becomes a builder eventually going into the business of erecting buildings. Twenty years on non-minor improvements are built (not necessarily by Child 2 - who could even be resident overseas) on the property. Five years after that the property is sold having been rented out all that time.
Under the ITA 1996, the sale of the property is not taxable as there was no-one in the business of erecting buildings at the time the property was acquired.
Under the ITA 2004 the sale is taxable as:
| • |
Child 2 is in the business of erecting buildings when the non-minor improvements are begun, |
| • |
Child 2 is associated with the Trust as a beneficiary, and |
| • |
the property is sold within 10 years of the improvements being undertaken. Why? |
|
Home | Contact Us | Background | Issues Log | Submission Form | Panel Statement | Maintenance Items Log |