Misc

Cullen drops tax hint

Finance minister Michael Cullen has dropped a very heavy hint this morning that he will abolish the capital gains tax on active managed funds.

Tuesday, October 19th 2004

Cullen told the annual Institute of Charted Accountants annual tax conference that the issue – long a bugbear for the financial services industry, and seen as an impediment to savings – could be considered as part of the current review of tax on investments being carried out by former BT Funds Management chief executive Craig Stobo.

“From my discussions with Craig Stobo and with members of the savings industry, an imperative seems to be to remove the tax on capital gains levied on savings through actively managed unit trusts and super schemes when it is not levied on individual investors or passive funds.

“This seems both unfair and inefficient – unfair because in practice a harsher tax treatment is likely to apply to small investors and inefficient because it represents an implicit tax on the use of institutional savings.”

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