Property accountants from Diprose are seeing a significant increase in Inland Revenue activity in the area of property sales. This is not surprising, given the impact of the ever-tightening ‘Bright-line’ test and the need for the government to collect as much revenue as it can in these difficult times.
Details of all property sale transactions are made available to Inland Revenue so they can review whether there is a potential income tax liability arising from the sale. They are definitely watching closely.
It’s very important that clients contact their property accountant prior to signing any agreement for the sale of property so that we can discuss any potential income tax issues and how these might be minimised or prevented.
In many cases there will be no opportunity for us to make a difference, but in others there may be options available that can save a significant amount of tax. This may involve reviewing effective dates, conditions of sale and values attributed to the various components of the sale.