Misc

Diana Clement: Gains tax change only part of story

Savers are in for a bonus if the Government sticks to its word and slashes capital gains tax from actively managed unit trusts and superannuation funds.

Monday, December 27th 2004

Returns on these funds have been cut to smithereens thanks to a 33 per cent tax on the income they produce. As a result, many of the investors who've tucked a total of $19 billion into these funds would have been better off ploughing their money into term deposits.

In case you missed the news, the recommendations proposed by independent adviser Craig Stobo and given broad support by Finance Minister Michael Cullen will see investors with managed funds taxed in the same way as they would be on a bank deposit. So if you're on the 19.5 per cent marginal tax rate, that is the amount that would be deducted at source.

Under the existing system, an investor who had $24,000 invested in the Fisher Funds NZ Growth Fund a year ago would have seen that increase to $29,983 after tax and fees. Under the proposed system, that investor's pot of money would have grown by an additional $2981, says Warren Couillault, the fund manager's investment analyst.

"This is a real coup for investors," says Tim Anderson, business manager at researcher FundSource. "With this distortion removed, we will get more competition, economies of scale that come with critical mass, and downward pressure on management fees. In Australia, the industry is 15 times as big as it is here with only four times the number of people."

Read More - Opens in a new window

Most Read

SBS FirstHome Combo 4.29
Unity First Home Buyer special 4.29
Co-operative Bank - First Home Special 4.85
China Construction Bank 4.85
TSB Special 4.89
ASB Bank 4.89
Kiwibank Special 4.89
Westpac Special 4.89
Kainga Ora 4.89
BNZ - Std 4.89
AIA - Go Home Loans 4.89
Nelson Building Society 4.93
Westpac Special 4.95
BNZ - Std 4.95
China Construction Bank 4.95
Wairarapa Building Society 4.95
Kiwibank Special 4.95
AIA - Go Home Loans 4.95
TSB Special 4.95
ANZ Special 4.95
ASB Bank 4.95
SBS Bank Special 4.95
SBS Bank Special 5.39
Westpac Special 5.39
Co-operative Bank - Owner Occ 5.59
ASB Bank 5.59
BNZ - Std 5.59
BNZ - Classic 5.59
AIA - Go Home Loans 5.59
Kainga Ora 5.69
Kiwibank Special 5.79
ANZ 5.79
TSB Special 5.89
SBS Construction lending for FHB 3.94
AIA - Back My Build 4.44
CFML 321 Loans 4.99
Co-operative Bank - Owner Occ 5.95
Co-operative Bank - Standard 5.95
Heartland Bank - Online 5.99
Pepper Money Prime 6.29
Kiwibank - Offset 6.35
Kiwibank 6.35
TSB Special 6.39
China Construction Bank Special 6.44

More Stories

Four decades of 6-7% yearly house price growth ending

Friday, March 21st 2025

Four decades of 6-7% yearly house price growth ending

New Zealander’s reliance on property capital gains in the mid-single digits is at an end.

[TMM Podcast] Yelsa serves up “marine reserve” of property buyers

Friday, January 31st 2025

[TMM Podcast] Yelsa serves up “marine reserve” of property buyers

It’s been years in the making and former real estate agent Mike Harvey is now coming to market with his platform matching buyers and sellers, an offering he says will be a gamechanger for the industry.

Leaving last year's stumbling housing market behind

Friday, January 17th 2025

Leaving last year's stumbling housing market behind

As interest rates ease and job losses climb, New Zealand’s housing market faces a mixed year of modest growth, with conflicting forces shaping the outlook for homebuyers and investors.

Don’t bet on house prices rising faster than incomes

Wednesday, January 15th 2025

Don’t bet on house prices rising faster than incomes

Former Reserve Bank Governor and National Party leader Don Brash says there are grounds for believing that house prices may finally have ended the three-decade period when they rose significantly faster than incomes.