Author: James Coleman
Published: 11 April 2022
Pages: 44

Introduction

This paper has a particular focus on the taxation of land transactions, particularly in the residential sector. This paper will look in particular at:
• The bright-line rules for residential land sales
• Residential land withholding tax
• The general provisions of taxing land
• Associated persons rules
• The long stop 10-year rules
• The exceptions to the land tax provisions; and
• GST on land transactions.
Lawyers are often asked to be trustees of trusts and hence this paper will look at GST obligations that arise when a person takes on a trusteeship.
The key piece of legislation which will be in focus is the Income Tax Act 2007 (ITA).
There are however changes being made to the bright-line rules in the Taxation Bill (Annual Rates for 2021–22, GST, and Remedial Matters), which, at the time of writing is currently before Parliament.
That bill will replace s CB 6A, with a new section CB 6A, through to CB 6AF. The text of those changes are in the appendix and are accurate as at the date of writing.
The paper will refer to the new provisions even though at the point of writing they are not yet law. Hence it is possible that there may be some variation in the section numbers or content of sections.

 

Content outline

• Taxation of the gains from disposing of residential land
• Exclusions to the residential land bright-line rules
• What amount exactly is subject to tax?
• Residential land withholding tax
• Taxation of land transactions outside of the bright-line situation
• Associated persons traps in the land taxation rules
• Exclusions
• Traps with GST

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