The Bright-line Test

In 2015, the government introduced the “bright-line test”, a method which attempts to tighten the property investment rules. The bright-line test states that (subject to exemptions) any gain from disposing of residential land within two years of acquiring it will be taxable. The test only applies to residential land. Residential land is land that has a dwelling on it or could have a dwelling on it and does not include farms or business premises. The bright-line test applies where a person’s “first interest” in residential land is acquired on or after 1 October 2015. Generally, a person acquires their “first
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Changes coming for Unit Title property

Townhouse and apartment living has become more prevalent in New Zealand in recent years, particularly in the larger cities of Auckland and Wellington, with multi-unit developments comprising 40 per cent of new builds in 2016. Growth in this area has put the existing legislation, which governs the ownership and management of Unit Titles, to the test. The outcome of this has been growing discontent with some aspects of the existing legislation. The rules relating to Unit Titles are now under review and look likely to change in the near future. The owner of a Unit Title owns part of a
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A contract is a contract – a cautionary tale about unfavourable deals

There once lived a Frenchwoman named Jeanne Louise Calment. She was a widow – her husband having died during the war (not in battle, mind you, but after eating some bad cherries). Her daughter died from pneumonia and her only grandson was killed in a motor accident. So in 1965, at the age of 90, Calment found herself living on her own and with no heir. She also had little in the way of private income, which was needed to fund the lifestyle to which she was accustomed. One thing she did have, however, was a Paris apartment. To make
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Indemnities to Employees

The extent of the employer’s liability to indemnify the employee will then be governed by the express wording of the contractual indemnity and, if the employer is a company, by section 162 of the Companies Act 1993. Usually such indemnities indemnify the employee against personal liability to a third party arising from the performance of the employee’s duties, provided the employee’s actions were in good faith and did not involve recklessness, wilful neglect or any wilful failure to carry out a lawful instruction from the employer. However in 2013 in the case of George v Auckland Council [2013] NZEmpC 179
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Abolishment of Gift Duty and Impact on Trusts

The abolishment of gift duty in October 2011 has changed the nature of asset and estate planning by making it possible to gift unlimited amounts directly to a trust in one transaction. There are however, certain consequences that donors (people making a gift) need to be mindful of when considering the amounts they wish to gift. Some of these are discussed below. RESIDENTIAL CARE SUBSIDY ENTITLEMENT Despite the changes to gift duty, the eligibility requirements for a residential care subsidy have remained the same. One of the eligibility tests for a means assessment is that the donors do not deprive
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