If you hold overseas shares (excluding Australian-listed companies) that cost more than $50,000 NZD in total, then you may be obliged to follow FIF (Foreign Investment Fund) tax rules with the IRD. In the reader's example the reinvested dividends will be picked up in the opening market value of the shares each year." Q. If the rules do apply to you, when calculating your 2007/08 taxes, start with the value of your offshore shares next April 1. On currency changes, the situation is the same, really. Her advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. "On-line calculators will be available on Inland Revenue's website which will calculate the tax answers for investors from the data they input," says Frawley. You buy and sell shares through a stock broker To buy and sell shares on the stock exchange (called ‘trading’) you’ll need to place an order through a stock broker – this is a company licensed to … You will simply be asked if they cost more than that, in which case you will pay the tax. US tax: $1.50 USD (one-off), $0.50 a year A one-off $1.50 USD fee is deducted from your first deposit to cover the set-up, and after that, a $0.50 fee is deducted from your account each year to sort your US taxes for you. We have a couple of shares which were bought some years ago for around 2000 and are now worth 55,000. Most New Zealand based fund managers have converted their retail funds into PIE funds. Frawley adds that taxpayers affected by the new rules will still be able to claim a foreign tax credit for the foreign withholding tax deducted from their gross dividends. A. Inland Revenue has no plans to publish such a list. However, with the new system due to be implemented this year, what does one do? Find out whether you need to pay UK tax on foreign income - residence and ‘non-dom’ status, tax returns, claiming relief if you’re taxed twice (including certificates of residence) will be your status as a New Zealand tax resident. They don't apply to overseas property, bonds or cash. Income Tax Act 1994, ss CF 6, LC 6, NG 1(2)(a). # Include the dividend as usual and not enter it in the value of the shares, or This is an annual tax on the rise in value of your holdings, not a tax on the sale. This is then converted to a certain number of shares, which are added to the base shareholding. Note, though, that the rules don't apply to investments in Australian resident listed companies, or if the total original cost of your non-Australian offshore shares is $50,000 or less. However, the exemption will apply for a limited period to trusts created on a person's death, so that trustees have sufficient time to deal with the deceased's estate under the will." He adds that "it has been a requirement for many years with the current Grey List exemption for a person to know whether the companies they invest in are resident in Grey List countries (Australia, United Kingdom, Germany, Norway, Spain, United States, Canada and Japan)". Do any readers know of any? Tax Technical - Inland Revenue NZ. In fact, New Zealand has the least cash circulating per person than any other OECD country. February 17, 2007 Q. Multinational Enterprises - Compliance Focus 2019 (PDF 941KB) Download guide Compliance focus documents from previous years. However, help is at hand. We've collated for you a selection of questions Mary has answered since the taxation legislation passed late last year. The $50,000 threshold. From reading the answers you got from Peter Frawley, I understand that the $50,000 threshold operates on the original cost of purchasing the shares. But if you do buy more shares, you need to add the cost of those purchases to the original costs of your current holdings. # Are all companies listed on the Australian stock exchange exempt or are some still caught by the tax rules, as are UK investment trusts listed on the NZ stock exchange? IR330C - choose a tax rate for your schedular payments. "The new rules have been designed to minimise investors' compliance costs," he says. For example BHP Billiton and Rio Tinto are dual listed in Australia and Britain, but are they resident in Australia? Inland Revenue is being unfair, if it leaves it up to the taxpayer to determine a company's residency. It's irrelevant what happens to their value after purchase. Probably the latter. # Drop it from the dividend declaration and have it included in the value of the shares? February 24, 2007 Q. I am in the position of having invested in a tech stock in Canada in 2002, at a cost of slightly over $60,000, as opposed to today's value of the stock of around $16,000. He adds that "individual facts and circumstances are taken into account". The answer to your third question is: "Yes, you can ignore the tax." 1) Is this a $50,000 exemption or a $50,000 threshold? shares in foreign companies (like what you buy on Hatch) rental properties in another country (not included in FIF rules) bank accounts (not included in FIF rules) If you’re a tax resident outside New … This way the opening value of overseas investment is zero. a New Zealand tax resident, or where the individual has previously returned income of the superannuation scheme under the FIF regime and elects to continue to do so. Go to www.taxpolicy.ird.govt.nz, and scroll down the homepage to February 23, "More on offshore investment changes". My answer - not Peter Frawley's - is that if your international share holding originally cost, say, $50,000 to $70,000, and you have no plans to buy any more international shares, it would probably be a good idea to sell down to below $50,000. If that is the case, you will be subject to tax only on overseas income or gains remitted to the UK. Is it still April 1, 2007, i.e. Simply the best portfolio management tool for DIY investors. Thanks very much. I think Frawley is politely trying to tell you the new rules will be easier than the old ones, so what are you moaning about! Browse new legislation. As it may not be readily apparent that an Australian listed company is not an Australian resident, is Inland Revenue going to provide such a schedule on its website, which will ensure that taxpayers can comply with the new legislation. As Frawley points out, when you calculate the tax, it will be based on the current market value. March 10, 2007 Q. 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