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  1. #11
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    I am confused here, LIC like Argo are exempt but Vanguards index fund that also invests in the 300 ASX index is not.

  2. #12
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    I have had a thought about this ridiculous bureaucratic nonsense that is FIF. But could you get past this extra tax paying loophole by setting up separate entities (limited or look through companies) and allocate $50,000 to each? Ie you have a portfolio of $500,000 so split this up into CoyA, CoyB, CoyC.... etc. Annual fees of $450 to keep the companies office happy and a bit of DIY accounting (10 IR4 returns, how hard can it be on a holding company) and that sure beats paying tax on $25,000 of "deemed income",

    Thoughts welcome.

    (I have ignored the one off cost of setting up the company)

  3. #13
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    Quote Originally Posted by blackcap View Post
    I have had a thought about this ridiculous bureaucratic nonsense that is FIF. But could you get past this extra tax paying loophole by setting up separate entities (limited or look through companies) and allocate $50,000 to each? Ie you have a portfolio of $500,000 so split this up into CoyA, CoyB, CoyC.... etc. Annual fees of $450 to keep the companies office happy and a bit of DIY accounting (10 IR4 returns, how hard can it be on a holding company) and that sure beats paying tax on $25,000 of "deemed income",

    Thoughts welcome.

    (I have ignored the one off cost of setting up the company)
    CQ 5(1)(d) "if the person is a natural person and not acting as a trustee"

    A company is not a natural person. The de minimis limit doesn't apply to companies.

  4. #14
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    Quote Originally Posted by scottwalshnz View Post
    CQ 5(1)(d) "if the person is a natural person and not acting as a trustee"

    A company is not a natural person. The de minimis limit doesn't apply to companies.
    You mean to say I should have been paying FIF tax on the $10,000 odd of Aussie investments a company I control owns? Oops...

  5. #15
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    Quote Originally Posted by blackcap View Post
    You mean to say I should have been paying FIF tax on the $10,000 odd of Aussie investments a company I control owns? Oops...

    If they aren't exempt stock, that would be my take. I'm no expert, I just went and read the act.

  6. #16
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    Quote Originally Posted by scottwalshnz View Post
    If they aren't exempt stock, that would be my take. I'm no expert, I just went and read the act.
    Cheers scottwalshnz, I call a terrible indictment on the IRD here. How are ordinary business and companies supposed to know their obligations in this regard when I who have an interest in the markets, knew about FIF (just presumed the 50K applied to all and sundry) still did not know of this obligation? I know ignorance of the law is no defence but surely there should have been better communication at the time? How many NZ companies have investments overseas I wonder and are unaware of their obligations as they stand.....

  7. #17
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    The de minimis does not apply to trusts either.

    This was all quite clearly explained at the introduction of the FIF regime but I am sure many have not accounted for it correctly.

  8. #18
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    Quote Originally Posted by blackcap View Post
    Cheers scottwalshnz, I call a terrible indictment on the IRD here. How are ordinary business and companies supposed to know their obligations in this regard when I who have an interest in the markets, knew about FIF (just presumed the 50K applied to all and sundry) still did not know of this obligation? I know ignorance of the law is no defence but surely there should have been better communication at the time? How many NZ companies have investments overseas I wonder and are unaware of their obligations as they stand.....
    I think they have tried to communicate the obligations, maybe it could be better, but they have attempted to get the information out.

    http://www.ird.govt.nz/toii/fif/how-...threshold.html

    They do have a guide on the subject, I think it needs to be clearer in places: http://www.ird.govt.nz/forms-guides/...dend-rate.html
    Plus the guide on completing an IR4 for your Company Tax return does mention it too: http://www.ird.govt.nz/forms-guides/...uide-2013.html (found the 2013 one first)

  9. #19
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    Quote Originally Posted by scottwalshnz View Post
    I think they have tried to communicate the obligations, maybe it could be better, but they have attempted to get the information out.

    http://www.ird.govt.nz/toii/fif/how-...threshold.html

    They do have a guide on the subject, I think it needs to be clearer in places: http://www.ird.govt.nz/forms-guides/...dend-rate.html
    Plus the guide on completing an IR4 for your Company Tax return does mention it too: http://www.ird.govt.nz/forms-guides/...uide-2013.html (found the 2013 one first)
    Thanks, have had a good read...

    So following this logic, I am better off "gifting" my brother in Australia a whole heap of cash and he can "invest" in the Australian stock market, making use of the franking credits and I not have to worry about the FIF. A win-win situation?

  10. #20
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    Quote Originally Posted by blackcap View Post
    Thanks, have had a good read...

    So following this logic, I am better off "gifting" my brother in Australia a whole heap of cash and he can "invest" in the Australian stock market, making use of the franking credits and I not have to worry about the FIF. A win-win situation?
    Definitely a Win for your Brother if he decides not to 'gift' it back.

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