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Investment Tax Changes
Effective 1st April 2007
Removal of Grey List Countries
Removal of the
Grey List countries with the exception of Australia.
New Zealand and Australian shares and
managed funds exempt capital gains tax
Australian equities will be
considered domestic rather than international
investments and will be exempt capital gains tax for
non-trading investors.
Note the dividends on Australian shares are taxed at 30%
and the "franking credits" cannot be offset against your
New Zealand tax liability.
Fair Dividend Rate Method
Under the
de-minimis rules
individual investors are exempt if they hold less than $50,000 (original
investment value) in investments outside New Zealand (Australian direct
share investments and investments held in PIE entities are exempt). This
exemption does not apply to investments held by Family Trusts.
For investments falling under the FDR rules the investment return (capital
and income) is taxed on the first 5% at the investors marginal tax (19.5%,
33%, 39%) rate up to a maximum tax rate of 30%. The tax is paid by the
individual and is subject to provisional tax rules apply.
Portfolio Investment Entity (PIE)
For investments through New Zealand registered fund managers registered as
PIE entities the investment return (capital and income) is taxed on the
first 5%, at the investors marginal tax rate up to a maximum tax rate of
30%. The tax is paid by the fund manager and provided PIE funds are the
only source of income there is no tax liability to the individual and no tax
return required.
If you have any concerns please phone or email
Disclaimer:
Information provided here is given as a guide only and
we recommend discussing your personal situation with a
qualified investment adviser or your accountant.
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