tax avoidance facts john and kristy sold their family home at market value to a look 239864

assignment 2 – T opic – Tax Avoidance Facts John and Kristy sold their family home at market value to a look-through company (LTC); The home is used by the LTC as a rental asset and is rented to John and Kristy

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T opic – Tax Avoidance Facts John and Kristy sold their family home at market value to a look-through company (LTC); The home is used by the LTC as a rental asset and is rented to John and Kristy at market rate; John and Kristy own 100 per cent of the shares in the LTC; The LTC borrowed from a bank to fund the purchase and John and Kristy guaranteed equally a bank loan of $300,000; John and Kristy then use the funds raised from the sale to purchase a new investment property; John and Kristy, in their capacity as holder of an effective look-through interest in the LTC, claimed a deduction for the interest incurred by the LTC on the loan. Required: Apply the above facts and conclude whether there has been a tax avoidance arrangement or not under the general anti-avoidance provision of the Income Tax Act 2007, s BG 1 and s YA 1 and relevant cases. Also outline the effect on a taxpayer if it is found that a tax avoidance arrangement exists. (Maximum 1,000 words) [20 Marks] This assignment must: – Be correctly referenced in a manner that conforms with the New Zealand Law Style Guide 2012; Be word-processed (font Times New Roman, size 12); 1.5 line – spaced; left margin at least 2.5 cm and right margin at least 3 cm; include a bibliography and a list of cases. 1??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

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