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  1. #1
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    Default ASX ETF - like S&P500 = NO FIF ?

    Just a quick question and i'm sure someone will know. Is there an index ETF on the ASX exchange that tracks the S&P500? I'm looking for a direct ticker stock to buy and not through some managed fund. The reason being I find there's a lack of transparency with NZ managed funds that do advertise buying US equities & ETFs but do not mention about FIF or the full tax implication.

  2. #2
    Reincarnated Panthera Snow Leopard's Avatar
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    Yes there is.
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  3. #3
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    Quote Originally Posted by Snow Leopard View Post
    Yes there is.
    Which ticker symbols? Thanks.

  4. #4
    Reincarnated Panthera Snow Leopard's Avatar
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    I presume you have managed to search the ASX website for the options available by now.
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  5. #5
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    Quote Originally Posted by Snow Leopard View Post
    I presume you have managed to search the ASX website for the options available by now.
    I've been looking and came across IVV. I also made a quick phone call to Jarden and the adviser says none of those ETFs that have a majority foreign (outside NZ/ASX) exposure holding equities will be exempted from FIF. IVV also has a franking rate of 0% which will be like most ETFs that hold foreign content and therefore will never be exempted from FIF as ASX franking is a requirement.

    Anotherwords, the adviser said to me, "You can't contract yourself to pick foreign holdings through a conduit (the ETF) when ultimately, the foreign holding is of non NZ/Aus based investments and therefore IRD will have in every right, to impose FIF". After all, the whole point of FIF is to tax overseas share investments that have a focus on capital gain growth (as NZ has no format CGT and such gains would be tax free without FIF).

  6. #6
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    Quote Originally Posted by SBQ View Post
    I've been looking and came across IVV. I also made a quick phone call to Jarden and the adviser says none of those ETFs that have a majority foreign (outside NZ/ASX) exposure holding equities will be exempted from FIF. IVV also has a franking rate of 0% which will be like most ETFs that hold foreign content and therefore will never be exempted from FIF as ASX franking is a requirement.

    Anotherwords, the adviser said to me, "You can't contract yourself to pick foreign holdings through a conduit (the ETF) when ultimately, the foreign holding is of non NZ/Aus based investments and therefore IRD will have in every right, to impose FIF". After all, the whole point of FIF is to tax overseas share investments that have a focus on capital gain growth (as NZ has no format CGT and such gains would be tax free without FIF).
    SBQ. If you are looking for Aussie instruments that are exempt to the FIF regime then arguably the best place for you to check is with the IRD direct. There is a specific webpage you can refer to in the first instance (provided below). The FIF regime has quite a few idiosyncrasies which makes determining whether an instrument comes under the provisions or not much more difficult. Sadly it's not as straightforward as simply checking that the entity is in the ASX200!

    https://www.ird.govt.nz/income-tax/i...ent-fund-rules
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  7. #7
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    Quote Originally Posted by FTG View Post
    SBQ. If you are looking for Aussie instruments that are exempt to the FIF regime then arguably the best place for you to check is with the IRD direct. There is a specific webpage you can refer to in the first instance (provided below). The FIF regime has quite a few idiosyncrasies which makes determining whether an instrument comes under the provisions or not much more difficult. Sadly it's not as straightforward as simply checking that the entity is in the ASX200!

    https://www.ird.govt.nz/income-tax/i...ent-fund-rules
    Thanks for the link to IRD - it just confirms what the financial adviser said to me today. IVV is clearly not FIF exempt. The end of the story is this, the well regarded index ETF S&P500, which comprises of say 99% foreign (or maybe 1% NZ / Aus companies in it?) is a far cry to expect it to be FIF exempted. To be really FIF exempt, you basically have to own NZX listing and some ASX listings.

  8. #8
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    Anyone dealt with this platform?
    https://blackbullmarkets.com/en/trading/index-cfds/

  9. #9
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    Quote Originally Posted by SBQ View Post
    To be really FIF exempt, you basically have to own NZX listing and some ASX listings.
    Not correct SBQ. Under certain circumstances an individual/entity doesn't need to come under the FIF regime at all.

    First up and as i assume you already know, there is the NZD50K threshold, which if kept under makes adherence & related compliance paperwork for the small investor a LOT simpler.
    Secondly, for those with overseas holdings exceeding the value of NZD50K there are other strategies & approaches one can deploy (don't worry - all very legal!) which means that one can elect NOT to be under the FIF regime. Of course the devil is in the detail, and there will be pro's & con's to being under FIF or not, as opposed to the alternative pathways. Plus, there are a variety of considerations particular to each individual's specific circumstances that needs to be considered. All quite technical and not suitable to being disseminated here on ST in generic form.

    The short story is DYOR, ideally with your Tax Accountant/Advisor.
    Last edited by FTG; 09-06-2021 at 09:33 AM.
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  10. #10
    Reincarnated Panthera Snow Leopard's Avatar
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    Statement of Fact:

    XRO, a NZ company listed on the ASX, is not subject to the FIF rules.
    om mani peme hum

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