(Independent Managed Funds)
You could do it yourself , or appoint an
Capital Gains Tax
Are exempt from capital gains tax on many
New Zealand and Australian sharemarket investments.
Could be subject to such a tax if the IRD
decides that the original investments were made for the purpose of
resale, particularly if there is a history of frequent buying and
Tax on Income
Income for individuals in the top income
tax bracket is taxed at 28%. Save time and money on tax returns
because all the tax is accounted for within the PIEs
Income for individuals in the top income
tax bracket is taxed at 33% All income received
has to be included in an individualís tax return.
Are governed by a prospectus system
which requires the manager to clearly set out the fundís investment
mandate, its fees, risk profile and other items relating to it.
Also have a trustee and are subject to direct oversight by the
Financial Markets Authority. The newly formed FMA has taken a proactive
approach on breaches of prospectus requirements, particularly in
relation to failed finance companies.
Direct funds do not have the
protection of a prospectus system, although a legal contract is
usually signed by the investor and the manager. These contracts
may or may not contain many of the requirements and information
included in a prospectus.
Are usually managed by an investment
team that does not have many client relationship responsibilities and
can spend most of its time on the management of these PIEs. May be
disadvantaged by the fact that investors have to accept the investment
direction of the manager, which may no be suitable to the individual
Are usually managed by individuals who
have client relationship responsibilities. Are often based
on model portfolios prepared by a companyís investment division. If
the investor has input into the portfolio the investor can instruct
the Manager as to desired content of investments in an individual
Many New Zealand PIE managers are
reluctant to disclose the up-to-date content and weightings of their
Investors in direct funds have full sight
of their portfolio
Tables in business magazines enable
investors to compare the performance of PIEs,
Comparisions of the performance of
IMAs with each other are not readily available.
Cashing up readily available
Cashing up usually readily available
When the PIE sends you your Income Tax
Generally PIEs need to provide their investors with notices confirming
information about their investments and tax credits available, by 31 May or
30 June after the end of the tax year.
PRESCRIBED INVESTOR RATE (PIR)
f you have invested in or are considering investing in a certain type of
portfolio investment entity (PIE) such as a KiwiSaver scheme, then you will
need a prescribed investor rate (PIR) to give to the PIE along with your IRD
Taxable income was $14,000 or less
If, in either of the previous two income years your taxable income
was $14,000 or less, and when combined with your PIE income or loss
then your PIR is ...
$48,000 or less in the income year
$48,001 to $70,000 in the income year
you don't already qualify for 10.5%
$70,001 or more in both of the previous two
Taxable income was $14,001 to $48,000
If in either of the previous two income years, your taxable income plus
your PIE income or loss was:
$70,000 or less in the income year, your PIR is 17.5%, or
$70,001 or more in both of the previous two income
years, your PIR is 28%.
Taxable income was more than $48,000
If your taxable income was more than $48,000 in both of
the previous two income years, your PIR is 28%.
TAX OBLIGATIONS IF YOU'RE TRADING
If you're selling goods online, do you know what taxes you may have to
pay? As a guide, if:
you bought the goods with the purpose of selling them on
the purpose was to make a profit
your business deals in these goods
then you're regarded as being in business and should declare sales from
Your tax obligations are the same as if you sold goods in a shop.
If you're in business and you use the internet as a primary or secondary
sales outlet you need to account for all the sales in your income tax
return. Businesses with sales of over $60,000 in any 12-month period (not
necessarily all through online sales) are required to register for GST and
file GST returns.
But if you're simply clearing out personal possessions there are
generally no tax obligations.