-
Originally Posted by 777
Has anyone worked out how they will handle a Macquarrie CMT account. Macquarrie sent out a letter saying it would be FDR liable for 2007/2008 but not for 2008/2009. However if you look at the IRD website (TIB's), they say that the exemption applies for the 2007/2008 year.
I suspect MacQuarrie had not caught up with the Commissioner of Inland Revenue's latest determinations at the time their letter was sent to you.
If you look at the April 2008 TIB on page 111 you will see that one of the exemptions to Australian unit trusts coming under the FIF regime include unit trusts that distribute over 70% of their income and use a RWT proxy. That should cover the Macquarrie CMT account.
If you want 'more specific' look at IRD determination FDR2008/2 issued on 8th February 2008. That specifically states that for the MacQuarrie Cash Trust, the FIF regime is *not* to be used.
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
-
Thanks Snoopy. That is how I read it but I am sure a lot of people will rely on Maquarrie's interpretation.
-
Originally Posted by 777
Thanks Snoopy. That is how I read it but I am sure a lot of people will rely on Maquarrie's interpretation.
I am sure a lot of people will try to follow Maquarrie's interpretation, *until* they find out what it means! Every transaction has to be processed with an appropriate exchange rate all the way through the year. With some people using their Maquarrie account as a defacto Australian bank account and putting through several transactions per month it would be a logistical nightmare to process! Of course that is exactly what the Commissioner of Inland Revenue discovered, and that is one reason why he made a ruling to exempt the Macquarrie cash trust from the FIF regime.
The fact that the Macquarrie CMT fell into the FIF hole was an obvious (with the benefit of hindsight) mistake. It is clearly not the kind defacto overseas sharemarket investment that the FIF regime was designed to catch. I know that Macquarrie is Australian based. But given the number of New Zealand account holders I would have thought that a letter to NZ based Macquarrie CMT holders explaining to them that it was *not* part of the FIF regime would be in order. Macquarrie are not alone in falling short in their advice.
I have a BT Hi Yield account (very similar to the Macquarrie CMT) in Australia and I received a note to say that I should do my own internet search on the IRD website or contact my tax adviser to see whether I was 'caught' by the FIF regime. Of course when I found out that the BT Hi Yield Trust was an FIF exempt investment I was both pleased and unpleased. Pleased that I didn't have to grind through a mountain of paperwork to satisfy IRD requirements. But very unpleased that BT had not sent me a letter saying it was exempt, as in this instance it is exempt for *all* New Zealand taxpayers, regardless of circumstances.
When I rang BT to give them an ear bashing over this laziness, all they could say was
"Well, yeah we should have done that."
I wonder if Macquarrie or BT will update their advice to NZ based account holders? In my opinion they should.
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
-
This could turn out to be a good little earner for any tax accountants out there...
Death will be reality, Life is just an illusion.
-
I sent out the spreadsheet on Friday to those who PM'd me for it. Please let me know if you didn't receive it or had difficulty with the file format.
-
Thanks Lizard
Received and no problems, I think I have it sorted now for the current (and last year),
thanks to your notes and spreadsheet.
-
Member
getting info ready for ird on shareholding. What a nightmare this is. Anyone has simple info on this. if I am under 50000 on overseas I pat tax on dividends but if I am over 50000 and in the last year lost money I pay no tax. Some aussie shares pay over 5% dividend and if not in an index my tax is limited to 5%
-
Member
can i use franking credits?
-
Originally Posted by voltage
can i use franking credits?
My understanding is that the answer is still NO!
Death will be reality, Life is just an illusion.
-
Member
Originally Posted by Snoopy
I am sure a lot of people will try to follow Maquarrie's interpretation, *until* they find out what it means! Every transaction has to be processed with an appropriate exchange rate all the way through the year. With some people using their Maquarrie account as a defacto Australian bank account and putting through several transactions per month it would be a logistical nightmare to process! Of course that is exactly what the Commissioner of Inland Revenue discovered, and that is one reason why he made a ruling to exempt the Macquarrie cash trust from the FIF regime.
The fact that the Macquarrie CMT fell into the FIF hole was an obvious (with the benefit of hindsight) mistake. It is clearly not the kind defacto overseas sharemarket investment that the FIF regime was designed to catch. I know that Macquarrie is Australian based. But given the number of New Zealand account holders I would have thought that a letter to NZ based Macquarrie CMT holders explaining to them that it was *not* part of the FIF regime would be in order. Macquarrie are not alone in falling short in their advice.
I have a BT Hi Yield account (very similar to the Macquarrie CMT) in Australia and I received a note to say that I should do my own internet search on the IRD website or contact my tax adviser to see whether I was 'caught' by the FIF regime. Of course when I found out that the BT Hi Yield Trust was an FIF exempt investment I was both pleased and unpleased. Pleased that I didn't have to grind through a mountain of paperwork to satisfy IRD requirements. But very unpleased that BT had not sent me a letter saying it was exempt, as in this instance it is exempt for *all* New Zealand taxpayers, regardless of circumstances.
When I rang BT to give them an ear bashing over this laziness, all they could say was
"Well, yeah we should have done that."
I wonder if Macquarrie or BT will update their advice to NZ based account holders? In my opinion they should.
SNOOPY
Isn't the reverse true in this case? If the Macquarie CMT was included under the FIF scheme as originally seemed the case, it is easy to calculate the tax owing - just multiply the balance at 1 April by 5% and multiply by you tax rate (except when total income from overseas investments is less than 5% when you must calculate actual income). Under the IRD ruling to exempt it from FIF, initial and final balance and all transactions must be converted into NZ dollars and any increase in value must be taxed. Is this true? If so, this is a bit more of a nightmare to calculate than the FIF system.
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks