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Devil In The Detail

Devil In The Detail

When involved in asset planning, you need tailored help from experts to get things right, as Matthew Gilligan explains.

By: Matthew Gilligan

28 February 2023

Whether you are a businessperson signing contracts, a property investor signing agreements with banks, a property trader, or a developer, you will want to pay as little tax as legally required and protect the assets you’ve worked so hard to attain. So how do you do this? Should you set up a company? A trust? Both? Neither?

The answer is in the asset planning process, and the objectives are threefold:

1. protect your assets

2. plan your estate

3. effectively and efficiently manage tax.

Without a good asset plan, your assets could unnecessarily land in creditors’ hands, the beneficiaries of your estate might not get what you intend to leave them, and you could pay too much tax (or not enough and get into trouble with IRD).

If your trust succession arrangements are incorrectly set up, your children could lose control of your trusts to lawyers or accountants. If your trust is not administered correctly, it could be deemed invalid, causing the assets to become available to creditors or spouses, or suffer adverse tax consequences.


You need tailored advice from experts who understand the tax, legal, and estate planning aspects of your situation. Be careful of one-sided advice from an accountant focusing on tax, or a lawyer focusing on the law. You need both disciplines working together.

The first step is to plan for failure. This may sound counterintuitive, but asking “what if you knew you would be bankrupt next year?” means you can put things in place to minimise the damage, should the worst occur.

Of course you don’t set out in life or business expecting a financial disaster, but left field events can happen (eg dishonest business partner, uninsured contractor damaging other people’s property, business failure). If you have good tax and trust structures, the negative impact on you and your family will be greatly reduced.


You will likely end up with a structure that completely fails at asset protection, where you are liable for all business disasters that may occur, and possibly lose your family home and/or end up bankrupt.

A poorly structured asset plan causes all assets to become available to creditors. We’ve seen many people in this situation, who’ve thought “my risk is low, what could possibly go wrong?” – without actually thinking about what could go wrong.

The people in the example illustrated above should have traded in a company, and had their assets held in trust. This would have quarantined the risks away from their family home and other business assets.

But then how does the tax work? It all needs to fit together, and moving assets can create tax disposal costs. So the tax planning needs to be done along with the asset protection.

These concepts are explained in GRA’s Tax and Trusts webinar, which is free to view: https://www.gra.co.nz/resources/seminar-recordings

Contact GRA for help: www.gra.co.nz/ contact/request-a-meeting