The Income Tax Act has specific provisions for clients who trade within the property industry such as land dealers, developers, subdividers and builders, or their associates.

The effect of these provisions can mean that land is subject to income tax when it may not have been if disposed of by another person. In some instances that also means that the interest deduction limitation should not apply to them.

This webinar will consider practical examples to help you understand:

• What these taxing provisions are;
• How they apply;
• When a person might have a “land dealing business” and whether this requires a certain number or frequency of property transactions;
• When a person might have a “land development or subdivision business” and whether this will only apply to the likes of Fletcher Building or whether it might apply to a person subdividing a residential section into a handful of lots;
• When a person might have a building business and whether this requires a person to be providing ‘turn-key’ build packages, or if it would extend to a hammer hand;
• What a “building improvement” is and how performing these improvements can affect the taxation of land;
• When a person can no longer rely on a residential or main home exclusion because they have a “regular pattern” of buying and selling land; and
• Who of these people might not be subject to an interest deductibility limitation.

Upon satisfactory completion of this activity you will be able to:

• Identify when the specific provisions of the Income Tax Act 2007 may apply to land disposed of by those in the property industry;
• Understand who might be carrying-on a land dealing, land development, land subdivision or building business; and
• Determine whether a person has a regular pattern of buying and selling land.

1.25 CPD hours

Suited to: Accountants, lawyers and others providing professional services to the property industry.

PRESENTER

Alex Cull, Manager, Findex/Crowe
Alex is based in Findex’s Wanaka office. He has over ten years’ experience in the tax field, having worked across corporate, small practice and administration.