NZ Herald 4 September 2021

AFirst things first: please stay away from any so-called get rich quick schemes. They will almost certainly get the promoter rich and you poorer.

Even in legitimate investments that can produce high returns — such as borrowing to invest in shares — you have to take lots of risk, and can end up with debt and no assets.

It seems to me that your chance of improving your lot is through your animal minding business. You’re clearly an animal lover, and I bet that shows when you talk to clients.

Put your energy into getting the word out — perhaps via social media and other people’s recommendations — that you can be trusted with people’s precious pets, and they should be willing to pay you fairly.

Obviously all that is limited at the moment with Covid 19 restrictions. But surely that will pass.

A few more thoughts:

• Have you explored whether you can get more benefits, social housing or help from the government with developing your business? There seems to be lots on workandincome.govt.nz.
• There’s also a variety of help on moneytalks.co.nz. As their website says, “We connect people and whānau with their local foodbanks, help them find their way through Work and Income processes and entitlements and support people to manage their money.” Working with one of their free financial mentors might really help you. MoneyTalks is run by FinCap, a non-government organisation.
• It doesn’t seem right that you should be in pain after your operation didn’t work. Ask your GP for help with that. If she or he doesn’t respond, try another GP.
• You may not be in a position to negotiate with your landlord, but maybe he or she is reading this column. So here’s a message for all landlords: please let tenants put up pictures. It’s such an important part of making a place your home. If a tenant leaves holes in your walls, the next tenant will probably cover them up with their pictures.

Let me know how you go with the business.

AIndeed. You won’t get one-tenth of 25 per cent these days.

But even back then you were extraordinarily lucky to get 25 per cent — which would more than double your money in three years. Wow. Reserve Bank figures show six-month returns averaged around 18 per cent at that time, and so did inflation.

I like your observation that the interest you earned on your house sale proceeds equalled your salary. Since then, house prices have soared but interest has shrunk even more. These days you might get $1 million for your house, but earn only 1.3 per cent on it — which comes to $13,000. That’s hardly a year’s pay.

AThanks for this. Several other readers wrote along similar lines. Some points that other readers made:

• If you are looking in a country other than in our list, Google “unclaimed money” and the country’s name.
• In the US you can also search state by state. eg New York has the “Office of the New York State Comptroller” at www.osc.state.ny.us.
• A reader who has used the above UK link says, “The service is free and you can make the application remotely. I used that website successfully, although I used it to retrieve an account which I knew about, but which the bank had closed (I didn’t consider it lost, and still had details of it, but the bank closed it after seven years of inactivity).

  “There was some work involved in getting the money paid out in terms of supplying appropriate AML (anti-money laundering) documents as the UK bank was very fussy. It had to be proof of address from a utility company (an insurance company letter wasn’t accepted). But it worked.”

AThanks to you too. And as a lawyer, you speak with some authority.

Note to the writer of the original letter: Do tell us how you go with this.

AIt depends.

I noted last week that because the young woman had bought her house before October 2015, the bright line rules don’t apply.

Under those rules, gains on the sale of rental property are taxed if the property is held for less than a certain period. From 2015 that was two years, then it increased to five years, and — since March 27 this year — ten years.

However, before October 2015, there was another law, which is still in effect. It says that gains on assets bought with the purpose or intent of selling at a gain are taxable.

The trouble is it can be tricky to establish what someone’s intent was at the time of purchase.

“Inland Revenue when considering a person’s intent will seek to obtain copies of mortgage applications made at the time of purchase and also the notes of the real estate agents involved,” says tax consultant Terry Baucher. “Any hint revealed by these of a purpose to sell will mean the gain becomes taxable, regardless of how long it’s been held.”

He points out that we don’t know the daughter’s intent when she bought the Auckland house. But given that the mother wrote about the daughter “selling her house (in Auckland, currently rented)” I assumed the house was originally the daughter’s home, and not bought with an eye on selling at a gain.

If I’m wrong about that, then yes, the gain on the house sale would be taxable.

AYou raise a really good point. Most other countries we compare ourselves with tax capital gains. And while I doubt if any of these taxes are as high as 40 per cent, they can certainly bite.

I haven’t taken up your suggestion of asking a tax expert what would apply in this situation. Tax can be complicated enough — as the previous Q&A suggests — without wading into the crocodile-infested waters of cross-border taxation.

Let’s just say that the daughter should look into this before making her decision.

Another reader wrote similarly. What a lot of generous readers you are — taking the trouble to raise points or pass on info to one another. It’s heart warming in these difficult times. Next week we’ll have another idea for the couple.