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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
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Experience:  34 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Is it possible to transfer a home that is currently in our

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Is it possible to transfer a home that is currently in our company name, to our private names? When the house was built, we claimed gst on it as we built it, as it was going to be for sale as a transportable.
Also, we own a lifestyle block that is currently in our company name. Our intentions were to grow and produce avocadoes for the market and make money from that. However, within 5 years of owning the property, the council changed the zoning to Industrial. Our avocadoes never produced, and our company now doesn't make a cent. My husband is a builder Sole trader, and we live in the home we built for sale. We want to transport it to a section to live in after we sell our Lifestyle block that is in our company name. Our original intentions were to live on this lifestyle propery for ever and make an income from fruit. None of that has happened. We want to sell it. Do we have to pay tax on the sale of the property? We have now owned it for 12 years.
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

christhelawyer : HiWelcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear
christhelawyer : The way it works with GST is that if you claimed it in purchase you have to pay on the sale. You won't have to pay tax on the profit on the sale however, because of the lapse of time and the failure of the original purpose. I would suggest that you may even want to consider liquidating the company, and getting the liquidator to sell you the property. But you need to discuss the most tax advantageous way to proceed with your accountant, so you don't end up with tax issues.
Customer:

Thank you, XXXXX XXXXX we transfer the house only into our private names, for instance, if the house is valued at $130,000, do we have to pay our company that amount for it to become ours, or do we simply transfer it into our private names and then pay the gst to the IRD?

christhelawyer : There would be tax issues for the company if it gifted you the property. What you need to do is for the company to sell the property to you, which will then leave the company as a cashed up shell. The company can then be liquidated and pay out the shareholders, so the money changes hands back to you. But this needs to be done carefully, so you don't end up with issues.
Customer:

Thank you, XXXXX XXXXX we need to have $130,000 actual dollars to pay to our company to buy it? or is it just a transfer thing?

christhelawyer : the money can go to the company and back, but needs proper resolutions etc. you don't want to end up with the company paying you the money back, and this being deemed income in your hands by IRD
Customer:

Thank you for your reply. I would like to rate your answer as excellent, and at the same time I would like to save what you have told me. Do I do the rating first and then save?

christhelawyer : You can still access the answer at any time, and you can print this off using control/p buttons.
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 19384
Experience: 34 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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