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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (8451)	8/20/2006 4:20:38 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 217740

Thanks, yes I found out what the real tax proposal in New Zealand is all about - rescinding a tax break for investment in seven "grey list" nations. Currently, gains and losses earned from passive investment in "grey list" entities — those resident in (1) Australia, (2) Canada, (3) Germany, (4) Japan, (5) Norway, (6) the United Kingdom, and (7) the United States — are exempt from tax. Gains and losses on investment in all other nations is currently taxed. Removal of grey list exemption Current exemption from the FIF rules for portfolio investments in companies resident in grey list countries will be abolished. A tax will apply on 85% of the capital gains from equity investments in countries outside New Zealand and certain exempt, ASX listed Australian companies. The tax will apply to gains on offshore investments such as Australian Unit trusts, whether listed or unlisted, UK listed investment funds and companies. Essentially investors with any portfolio investments in equities in any country, with some narrow exemptions for Australia, will be subject to the tax. Companies which are listed on the NZX but which are based overseas will not be exempt. The exception is Guinness Peat (GPG), which after intensive lobbying managed to get a unique exemption for five years. The tax will be payable on unrealised gains with the option for a cap of 5% of the opening value of the investments in each year. The balance would be carried forward until the investment is sold and not reinvested (repatriated). At this point, tax on gains which have been carried forward would be payable. Other Exemptions Individual investors with $50,000 or less (based on the cost of the investment) invested offshore will be exempt. This exemption does not apply to investments made by family trusts or NZ companies. Investments in certain Australian companies, which are listed on the ASX, will be exempt. This exemption does not apply to ASX listed trusts nor ASX listed companies, which are not based in Australia. It doesn't look that onerous to me. Taxation Calculations Notwithstanding the impost of the additional tax, most investors will find the calculations extraordinarily complex. Because the tax will be on unrealised gains, and may involve carry forward calculations which need to factor in nett realisations on investments which may have been held for many years, tax records and mathematics will be tortuous. Dividends and distributions from any source will continue to be taxed. .