Inland Revenue is considering a change that could find people with their homes in family trusts hit by tax rates of 45% for the benefit they receive, tax experts warned yesterday.
Wednesday, September 24th 2003, 4:32AM
by The Landlord
The IRD has put forward a proposal, ED47, that would see qualifying or "good" trusts reclassified as non-qualifying or "bad" trusts if they are found to have any outstanding tax to be paid, even inadvertently.
They would then have to pay 45c in the dollar on any distributions including retrospectively if it took the IRD several years to challenge their tax return.
But trust specialist Bill Patterson said the sting in the tail of the proposal was that this could also catch people living rent free or at below market rent in a home owned by their family trust.
