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  1. #11
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    Quote Originally Posted by RRR View Post
    Interesting. How can they do that since the income/dividend is not realised at the time - of course we will be declaring the DRP dividends at the time of IT return. What if there is no money left in the Australian $ account? I usually keep a few hundred $ in the account, but will aim to keep it close to zero from now on.
    If you don't have any funds in your Australian CM account then ASB will simply transfer fees from your NZ Cash Management Account. I asked about the possibility of just paying the withholding tax in NZ, seeing that it is a NZ charge, but ASB said it had to go to Australia. So I guess I have no alternative but to pay fx fees as well! With that in mind I'm now keeping sufficient funds in my Australian CM account to cover the withholding tax deductions.

  2. #12
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    Quote Originally Posted by Aaron View Post
    Fair enough they calculate daily interest on savings and mortgages but probably not motivated to with fees. $250 per annum for flexible finance doesn't seem too bad to me.

    It would be ASB Securities deducting the tax and filing it with IRD on our behalf. I think Australia has been blocking mutually recognising Imputation and Franking credits between the two countries which would be a good increase in our Aussie dividends if it ever happened.
    https://www.nbr.co.nz/article/govern...edits-b-173961

    We aren't paying extra tax, we are just paying it early. The net (after franking credit) aussie dividend still needs to be declared as income it just that ASB Securities has already paid the tax on our behalf. If your income is less than $70,000 per annum you should get some back. Have had a couple of copies of dividend cheques in the post so it will be interesting to see what gets deposited and what notification regarding the tax deducted we will get. For some reason I can't see my Aussie dollar account online so have to wait for intermittent statements.

    CGT would have been another tax but only on any capital gain.
    Thanks for that Aaron. Still have to pay tax on DRP though. The only way I can minimise the impact of this 'double taxation' is to move funds back and forward NZ-AU according to the fx rate at the time. I've bought more AU shares lately with the NZ dollar being worth more than 95c and intend to sell more and remit money back to NZ when it gets down to somewhere around 85c. Who knows when that will be but it will reduce the impact of 'double taxation' as long as I don't need the funds for anything else.

  3. #13
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    Quote Originally Posted by Robomo View Post
    Thanks for that Aaron. Still have to pay tax on DRP though. The only way I can minimise the impact of this 'double taxation' is to move funds back and forward NZ-AU according to the fx rate at the time. I've bought more AU shares lately with the NZ dollar being worth more than 95c and intend to sell more and remit money back to NZ when it gets down to somewhere around 85c. Who knows when that will be but it will reduce the impact of 'double taxation' as long as I don't need the funds for anything else.
    Not sure I understand what you are suggesting but the tax deducted is only from dividends, not the sale of shares. It is not an additional tax, just tax deducted at source not quite source but at ASB level. Like PAYE from wages. As I am not entirely sure of what you are doing regarding moving money around you might want to read what KPMG has to say on foreign currency bank accounts.
    https://home.kpmg/content/dam/kpmg/p...rview-2015.pdf

    Don't forget to include your realised foreign currency gains in your 2019 tax return or unrealised gains if you are not "cash basis person". Sometimes it is better to ignore the rules as the IRD are unlikely to catch up but they might be getting more efficient with their new computer upgrade. Surprised a few people last year when IRD asked them to include their PIE income in their tax returns as they were using the wrong PIR rate.

  4. #14
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    Quote Originally Posted by Aaron View Post
    Not necessarily ASB Securities deducted money directly from my account to cover the withholding tax on a dividend that was reinvested in a DRP with Newcrest. That is what alerted me to the change.
    I participated in the Invocare DRP - no tax deducted by ASB!

  5. #15
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    Quote Originally Posted by RRR View Post
    I participated in the Invocare DRP - no tax deducted by ASB!
    Who knows how it works. I have a margin lending facility so the shares are held by ASB Securities possibly that is the difference. I don't know how they would keep track of it all anyway. Not a big deal I suppose just means the end of year tax bill is lower.

  6. #16
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    Quote Originally Posted by Aaron View Post
    Who knows how it works. I have a margin lending facility so the shares are held by ASB Securities possibly that is the difference. I don't know how they would keep track of it all anyway. Not a big deal I suppose just means the end of year tax bill is lower.
    I spoke too early! Re - Invocare DRP - ASB sec have now taken the tax from my Australian $ account.

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