[Tia Maria]

I was reading a magazine aimed at new immigrants, with an article saying,

"If you are buying a house here, (NZ), and bringing all your money with you, you need to put it, (the house), straight into a trust as soon as you can because otherwise there are tax implications."

Unfortunately, it wasn't helpful enough to explain why there was tax implications, and what they were.

Anybody else heard of this? Anybody put their house in trust?

Cheers

Tia

[Wannaway]

I think this may be a bit misleading, as I don't think there are any "tax" implications. As I understand the benefit of putting the family home into a family trust is that it protects the asset from claims from creditors and also, potentially, unscrupulous suitors who may court your offspring only to get at their assets (ie inheritance from parents). The last point may or may not be relevant depending on circumstances.

Family trusts are relatively simple to set up, but you will need a solicitor and I would guess fees could be around the $1k mark. We are (hopefully!) about to embark on a house purchase ourselves so I might be able to answer this more fully in a week or two's time.

Trusts can be used to reduce income tax in NZ in relation to income earning assets (a family home resided in by the family would not be income earning, hence my comment above), but whether or not the cost/benefit analysis works will depend on circumstances. Sorry, can't give any more advice at this stage, if I nut it out myself I will post what I can.

[lisa]

We were advised by an accountant to set up a trust when we bought our house, although our solicitor advised us there was no compelling reason to do so (other than to give the account some easy money). His opinion was trusts are beneficial in some circumstances, but they are currently seen as "the" thing to have.

If you do a search on trusts you should come up with a couple of previous threads that have some more info.

[Tia Maria]

Thanks you two - I don't think a trust is necessary for our situation, so we won't be setting one up.

Wannaway - We're also in the process of sorting out a conditional offer. We made it subject to finace, Lim and buildings report. So we're rushing about trying to get everything sorted. The main problem we've had so far is just transferring our money from the UK. Which just takes a ridiculously long time.

Hope everything goes smoothly for you.

Cheers

Tia