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  1. #41
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    Quote Originally Posted by Billy Boy View Post
    Hi Skol
    Seams a few of us have been in your boat(so to speak) asset rich, cash poor. I now have no comercial properties, and have invested in LPT's
    mainly. It,s the best move I've made so far. As you say no worries,
    Rates, tennants, etc.... and the reterns are Tax Free.
    Have been watching NAP lately and picked up a few. They appear
    to be getting the house in order. Managing things well. KPF is
    clipping along nicely.
    APT welllll..... go some housework to do. I use to hold but got out
    some time ago.
    I would have though ING could have moved SP wise but there again
    with the ANZ takeover things need to settle.
    GMT now trading around NTA.... Hmmmmm I hold a lot.
    Your thoughts welcome
    Cheers BB


    All good stuff. Not a bad idea thought to keep enough commercial to give you at least the first 70,000 of income, and use the LPTs from there on to avoid the 38% tax rate.

  2. #42
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    Quote Originally Posted by portalou View Post
    Does any one know about tax deductions for PIE income. For example if you had interest costs from a loan to purchase shares in a LPT would that be deductible against your taxable income.
    I think so.

    At one point I worked out the benefit of borrowing $1m from kiwibank secured against $1m deposited into their 1 year TD pie. Currently a $3k loss but when I originally did it was about $1k positive. Not enough to make it worthwhile and I didn't think they would lend me $100m to do it.. [edit - I just remembered - I was on a PIR of 19.5% but marginal rate of 39% at the time (due to specific circumstances) so it wasn't a scheme that could be rolled out to the masses so didn't pursue - so would be up $1500 on a $1m loan/investment based on current rates (my PIR has now chagned though)]
    Last edited by CJ; 03-02-2010 at 07:28 AM.
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  3. #43
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    Quote Originally Posted by portalou View Post
    I have heard the LPT's pay dividends under the PIE regime.

    Under the PIE regime if you nominate the correct PIE rate for your income level PIE income is not included in your tax return. Very nice for people in high tax brackets.

    Does any one know about tax deductions for PIE income. For example if you had interest costs from a loan to purchase shares in a LPT would that be deductible against your taxable income.
    I don't think you can nominate a PIE rate for listed funds. They work on the 30c rate although some of the income may be imputed in which case you can include that and claim the imputation credits. No gain to 30c payers but of use to the lower rates.

    This may be of use to regarding changes to rates on 1/4/10.

    http://www.ird.govt.nz/news-updates/...tax-rates.html

  4. #44
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    Quote Originally Posted by 777 View Post
    I don't think you can nominate a PIE rate for listed funds. They work on the 30c rate although some of the income may be imputed in which case you can include that and claim the imputation credits. No gain to 30c payers but of use to the lower rates.

    This may be of use to regarding changes to rates on 1/4/10.

    http://www.ird.govt.nz/news-updates/...tax-rates.html
    Interest costs are deductible. Income from pies does not need to be icluded in return. You can nominate your PIR - prescibed investor rate - which is your marginal tax rate. If you don't the default rate is 30%. From memory there is a difference in the way low income earners are treated, but sorts itself out because they claim imputation. Ages since I sussed it all out and can't remember, but it will be on IRD site.

  5. #45
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    Fungus there is no choice of nominating a PIR for "listed" funds. ie those traded on the NZX. Any sorting out of tax paid has to be done at tax return time. That is where the IRD wins because so many people don't bother to fill one out.

  6. #46
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    Quote Originally Posted by 777 View Post
    Fungus there is no choice of nominating a PIR for "listed" funds. ie those traded on the NZX. Any sorting out of tax paid has to be done at tax return time. That is where the IRD wins because so many people don't bother to fill one out.
    Oops! Sorry - you're quite right of course when it comes to NZX stuff. I'll crwl back under my rock.:o

  7. #47
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    No problem Fungus. I use the PIE system to my advantage but it has a complexity in it self. Things would be a lot simpler if with the restructuring of the tax system they simply came up with one tax rate for investment income. Full and final like PIE. Not part of income tax. Something in the 10-20 cent range.

  8. #48
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    Quote Originally Posted by 777 View Post
    Something in the 10-20 cent range.
    There might be a long wait before that is seen, if ever ...

  9. #49
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    Quote Originally Posted by 777 View Post
    No problem Fungus. I use the PIE system to my advantage but it has a complexity in it self. Things would be a lot simpler if with the restructuring of the tax system they simply came up with one tax rate for investment income. Full and final like PIE. Not part of income tax. Something in the 10-20 cent range.
    I'd be a starter for that - having no other income. Bring it on .......

  10. #50
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    APT reckons a 10% hit to bottomline if depreciation is removed and land tax introduced.
    That is an understatement in my opinion. Also, big research houses talking about vacancy rates remaining high well into 2010-11.

    With the interest rate expected to harden, LPT are sitting ducks in the short term if the proposed Tax legislation comes to fruition. If depreciation rules include other businesses as well, then I would expect on impact on all stocks by at least 10% ...

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