COA - Coats Group plc (formerly GPG - Guinness Peat Group Plc)

[warthog]

quote:Originally posted by stevieb

To date all the information I have seen is that the tax (and the threshold) relate to individuals only.

Specific mention is made of couples where - unsurprisingly - the threshold is $100k.

[stevieb]

quote:Originally posted by warthog

quote:Originally posted by stevieb

To date all the information I have seen is that the tax (and the threshold) relate to individuals only.

Specific mention is made of couples where - unsurprisingly - the threshold is $100k.

I think the point of that is that rather than being treated as two separate individuals you can combine limits, i.e. one at 75K and one at 20K will be acceptable whereas normally 75K would be caught. Will be interesting how this works, kind of assumes everyone knows what their other half has in investments which is not always the case!

[Snoopy]

quote:Originally posted by Gryffyn


Snoop - GPG is the only share I have that will be hit. My OZYs are already exempt. If I split my holding into parcels that had a n initial price of less than 50k and spread amongst various entities (me, wife, ...) then the sum of all will be exempt.

If you rope in the wife into your equation, then yes - your cost limit goes up to $100,000.

However, I would not recommend *actually* transferring the GPG shares to your wife. If you did that you would have to transfer them at today's market price! That would increase your cost price for GPG shares 'as a couple'. Such a transfer would effectively lower the ceiling on the number of GPG shares you can own as a couple, if you wish to 'duck under the tax threshold bar'.

You can certainly transfer shares to other members of the family. But only $27500 of current value (IIRC) before you incur gift duty.

SNOOPY

[Snoopy]

quote:Originally posted by Ted2

What if you have a parcel held in a company name? ie. I have my current holding registered in my company name. I can still buy a fair few more before I hit 50K COST.
Can I not then buy another 49K in my personal name?

Answers please!

Cheers
Ted

I am not aware of any proposal to exempt companies at all from this new tax. There is no proposed ceiling for companies. IOW even if your company only own's a single GPG share it will still be subject to the new tax.

SNOOPY

[Snoopy]

quote:Originally posted by warthog



Might defer to Snoopy's expertise in this area, but one thing is obvious - if your holding is in a company, then it pays tax on any profits it makes, or if you pay yourself dividends or a salary, they are taxed accordingly, so I don't see what advantage - if any - you might have by using a company other to reduce your existing personal holding.

I suppose you could transfer the excess to your company at market value and buy any more with the company, leaving you under the threshold of $50k cost. Remember this is for *all* of your non-NZ/Australian shares, not just GPG.

Alternative views??

Basically, I agree with everything you say in that post of yours Warthog.

However, I do stress that, as yet, the new legislation is unwritten as we write this. That means we can all give only 'best guess' opinions at this point.

Transferring your overseas shares, in excess of the $50,000 cost price threshold, to a company would make sense if it got *you personally* under the $50,000 limit. Of course the act of transferring excess shares wouldn't save any tax within the company structure. Because there is no proposed exemption limit at all for companies!

You would also need to consider whether there was some kind of 'look through' provision as regards individuals and the private companies they own under the legislation. By that I mean, let's consider if you own -say 100%- of a private company, that in turn owns shares in GPG. That GPG shareholding within your own private company will have to valued annually for NZ company tax purposes. And that value of your private company may be deemed as an overseas interest of yourself personally.

It is my belief that you will not be able to avoid this tax by transferring your own GPG shares to your own private company.

SNOOPY

[duncan macgregor]

You can have all sorts of companies paying tax in their own right. The problem arises when you transfer money from your own account to a company account or indeed a trust account without gift duties. Most family trusts go through years of transferring money to avoid this penalty. You simply cant set up a company to avoid tax without striking this problem. Each company is in its own right a seperate tax entity which takes time to set up. macdunk

[warthog]

quote:Originally posted by Snoopy

if you own -say 100%- of a private company

IRD call these companies "close companies".

quote:It is my belief that you will not be able to avoid this tax by transferring your own formerly-grey-market shares to your own private company.

Hmm. Why not? If the relevant shares were legitimately sold to the company at market value, and this brings the individual's personal formerly-grey-market long-term investments under NZ$50k, then there is no reason why the (or any) tax would apply.

Of course, if the company then sold the shares and made a profit, then tax would be paid on that profit, one way or another, but this wouldn't be the Cullen+Dunne scheme recently announced - it would either be company tax or personal income tax.

[shasta]

Warthog, if you want to know the affect this has on companies email me, we seem to have alot of people guessing here without really knowing.

[CJ]

Shasta - what is your guess (off course everyone is guess, the legislation isn't enacted yet).

My understanding is the new rules apply to Companies (ie taxed on unrealised gains)but the $50k exemption only applies to individuals.

Therefore you could sell to a compnay to get you under the $50k limit but you company will be subject to the rules on its holding.

My understanding is that it is the same for trusts.

[Sideshow Bob]

Big one page add in today's ODT sponsored by GPG regarding the proposed new taxation on unrealised capital gains in overseas companies.

Quotes a number of investors (with names changed) and encourages people to e-mail the Prime Minister.

Presume will be in all the other major dailies.