Quote Originally Posted by Snoopy View Post
SBQ did you even read Fungus's post before you replied to it?

Fungus said:
"Also, managed funds paid tax on capital gains when they sold New Zealand shares, while direct investors usually only had to pay tax on dividends – the PIE rules removed this inconsistency."

This implies wither that:

1/ PIE funds do not pay tax on capital gains for NZ based share investments, OR
2/ Individual NZ shareholders do pay tax on share capital gains (which as a rule is not true).

SNOOPY
1/ Regardless of the managed fund status (PIE or not), the portfolio is taxed on the gains for the simple reason, the investment is "intent to profit" ; no different to operating a business.
2/ Individuals that invest directly on NZ shares - IF and to be clear.. IF they keep the investment long enough to show NO intent of buying and selling shares like a trading account or a managed fund would behave, THEN the capital gains are tax free (no different to holding a house for more than 5 years).

Therefore, the PIE rules do NOT remove this inconsistency and they're not even comparable. All it does is it gives a small break for the top income earners in the 33% tax bracket. Look at the whole picture - the PIE accomplishes nothing in removing the tax differences between individuals and those into managed funds despite both would invest in the same asset class.