BEST OWNERSHIP STRUCTURES FOR INVESTMENT PROPERTY

Best ownership structures for Investment Property – what are they? This is an excerpt from Diana Clement‘s regular series in the NZ Herald.*

‘Ownership of LTCs can be tweaked according to the income and tax rate of the couple or partners involved. Where the property is making a profit, for example, says accountant Garreth Collard, of EpsomTax.com, the majority shareholder of the LTC could be a spouse who is in the lowest tax bracket. This is ideal where that person is on the 17.5 percent tax bracket or lower.

It’s a good idea to involve an accountant and lawyer in setting up the LTC so you don’t risk being accused of tax avoidance in the future.

Nine times out of 10, argues Collard, an LTC is the best structure for owning a rental property: “You have the benefit of limited liability, a legal structure that is clearly a separate entity yet under your control, and yet it is treated at tax time like a partnership: the best of both worlds.”‘

More information here; see also this video about LTCs

Would you like to know about LTCs vs partnerships vs Trusts?

• See also this article on LTCs vs QCs and LAQCs, or
• This article on the merits of trusts vs LTCs

​Search our site for more information, check out the FAQ page, or simply contact us!