| | Investment Tax Changes Effective 1st April 2007Removal 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 are considered domestic rather than international investments and are exempt capital gains tax for non-trading investors.
Note 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 rate (19.5%, 33%, 39%) 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.
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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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