Tax Overhaul has started
The tax overhaul has started off with the tax treatment
of investment.
The main changes:
In New Zealand
* Earnings in a managed fund will be taxed at 19.5 per cent if
that is the investor's marginal rate or 33 per cent
otherwise.
* Managed funds will no longer pay capital gains tax on their
holdings of New Zealand and Australian listed shares.
Investments outside Australia
* Individual investors who hold shares directly in overseas
countries other than Australia will be taxed on 85 per cent of
their capital gains, even if unrealised.
* But it is capped. If the capital gain is more than 5 per cent in
any one year, they will only pay tax on a 5 per cent gain. The rest
will be carried forward but will only be taxed if the shares are
sold and the proceeds repatriated.
* The capital gains tax only applies to investors with more than
$50,000, on an original cost basis, invested outside New Zealand
and Australia, or $100,000 for a couple.
* Passive or tracker funds invested outside Australia will be
treated the same as direct investors.
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