Black Monday

[alokdhir]

The proposed increase, from 33% to 39%, will bring trusts into line with the top marginal tax rates for individuals from 1 April 2024

Investors are realising that the impact of the widening of this tax rate gap on net returns will be felt both immediately and exponentially over time, and we have seen an increase in enquiries into the benefits of investing via the PIE investment vehicles versus investing via directly-held assets

“For those investors who use a family trust as their vehicle for investment assets, now is a good time to seek independent tax advice on the structure of your investments.


A trust investor accessing term deposits or cash assets directly at the same rate of 6% and paying the higher marginal tax rate of 39% will now earn a net rate of 3.66%. Put another way, for the same $1m investment, they would generate net income of $36,600 for the year; $6,600 lower than from the PIE assets

https://www.interest.co.nz/investing...benefits-using

Im guessing this will have ramifications on people investing directly in the stockmarket via trusts

Already listed PIEs had advantage for Individual Investors at rates higher than 28% ....now Trusts have also joined to enhance that advantage ....KFL shud shine more and why not ...as one saves 11% tax by choosing KFL over DIY ..especially for Trust Investments ....Percy shud advise his trust to have a look at listed PIEs tax advantages over direct investments in stocks ....Now such direct investments will have to pay further tax of 6% on top of already deducted 33% for directly held dividends

[ronaldson]

My family trust is the vehicle for our investment assets, and where these are invested for income is heavily weighted to PIEs. But it begs the question whether the PIE rate for Trusts (or even individuals) will remain at 28% going forward.

Once the current proposed changes are enacted (to come into force on 1 April 2024) and are bedded in then if a Labour/Greens government prevails in October I expect the Pie rate to be reviewed to 33% for individuals/trustees, especially given that those persons for whom that exceeds their marginal rate can declare that income and receive a refund at year end subject only to lodging their tax return. Given a government which will be desperate for tax revenue to support their income redistribution initiatives that would be entirely unsurprising and completely foreseeable.

[mike2020]

I have KFL in a trust account. Every time I read the comments section on interest.co they largely see interest rates rising further and pain through the whole economy next 12 months, regardless of election results. How do you think all of those growth stocks that have been following the property market down with interest rate rises will fare?

If you look at news this week you have lower asking prices in June, rising stress on loans and agents predicting a flood of listings in the next 6 months. Is this just the doom and gloomers?

[Bobdn]

Growth stocks following property down? USGs been doing well for me, its up almost 40 per cent year to date.

Are there other growth stocks out there I'm not aware of?

Sounds like I'm winning - I'm not. Truth is my overall per annum returns over the last two years is just 4.5 per cent net of fees and taxes. Well below the rate of inflation. Return of the Sp500 is 3.4 per cent in that period pa. My "out performance" is the slide in the NZD.

Tom Keene last night revealed that SPX has only returned 3.4 per cent per year over the last two years. I was shocked! Such low returns in a nasty high inflationary environment. Surely I've done better! Nope, not really.

[SailorRob]

I have KFL in a trust account. Every time I read the comments section on interest.co they largely see interest rates rising further and pain through the whole economy next 12 months, regardless of election results. How do you think all of those growth stocks that have been following the property market down with interest rate rises will fare?

If you look at news this week you have lower asking prices in June, rising stress on loans and agents predicting a flood of listings in the next 6 months. Is this just the doom and gloomers?

Indeed a robust way to predict the future is to look at comments on a website.

[mike2020]

Quite the opposite I find. Some pretty extreme points of view on there.
Ok not all of kfls holdings are down. IFT is a standout.

[alokdhir]

Quite the opposite I find. Some pretty extreme points of view on there.
Ok not all of kfls holdings are down. IFT is a standout.

Just dont worry ....Have faith in KFL portfolio mate ....it will be just fine ...We will discuss how fine in 12 months ...lol

Also please note that KFL portfolio is largely unaffected by NZ local economy ...when economy bottoms stocks are already 25% up from bottom .

[Habits]

Quite the opposite I find. Some pretty extreme points of view on there.
Ok not all of kfls holdings are down. IFT is a standout.

There must be 4 to 1 of for and against on interest.com.

Four times as many favour woe

[bull....]

Quite the opposite I find. Some pretty extreme points of view on there.
Ok not all of kfls holdings are down. IFT is a standout.

random sample of kfl holdings from period 21 - to current show's

aia up 20%
cen up 22%
ebo up 33%
fph down 14%
ift up 45%
mft up 6%
mel up 4%
pot down 18%
rym down 55%
sum down 25%
atm down 47%
vgl flat

[winner69]

random sample of kfl holdings from period 21 - to current show's

aia up 20%
cen up 22%
ebo up 33%
fph down 14%
ift up 45%
mft up 6%
mel up 4%
pot down 18%
rym down 55%
sum down 25%
atm down 47%
vgl flat

Shame they pick so many big losers eh bull