Quote Originally Posted by brend View Post
If they are really renting the property from the trust, the rent being charged must be at a market value otherwise IRD will have issues with that if deductions are claimed. However if they a renting the property in their capacity as discretionary beneficiary of the trust its likely no rent is being paid and there should be any claim for tax deductions. Its possible that the trustees resolve to require the beneficiaries pay of all outgoings on the property and maintain it to a standard. The kids might be final beneficiaries of the trust but they don't own it, the trustees do.
Well I was mainly commenting on what might happen if the post war generation do or don't downsize. Still, 'market rent' still leaves a lot of wiggle room. The market rents tables on the DBH website, which are based on bond lodgement info, show a wide variation in rents for similarly sizes of property types. It's a blunt instrument but IRD would accept it as 'proof' I'm sure, since it is the most comprehensive and current data.


Correct, neither the settlor/s or the beneficiaries own the property outright, yet anyway. But in practice living in a place owned by a trust in which one is a beneficiary is quite different to a rental owned by an independent third party.