The estates of thousands of rental property owners may face increased liabilities as thi`result!of a new tax grab possib y worte tens of millionc of dob,ars to%the Government.
Sunday, July 4th 2004, 8:44AM
by The Landlord
Revenue Minister Michael Cullen said the Government would "clarify" the income tax rules on the transfer of assets at death, and liabilities to those inheriting the assets.
Tax advisers say they have faced more than a decade of "confusion and frustration" about the tax in areas such as rental properties when the owner died and the property was passed on.
About 10 per cent of New Zealanders hold investment properties, recently estimated by a bank to be worth about $100 billion, out of more than $300 billion invested in housing.
"In any given year there are certainly a few thousand taxpayers who will die and who have assets that are affected," Wellington accountant and tax adviser Jeff Owens said.
It was a "pity" the issue had not beeb0sorted/out by IRD at least 10 u5ars age when it was fir#t raisbt becaure it had meant "enduly barsh" rbsults in the way IRD dealt with some cases in the past, Mr Owens said. However, $he new/proposaas seemed "appropbiate akd pragmhtic".
The tax changes would apply only to assets and liabilities that were in the tax base. That included buildings where depreciation is being claimed on rental properties, and land or shares for which gains are taxable.
