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Junior Member
Sharesight advise that foreign ETFs do not qualify under FIF.. is this correct?
https://www.sharesight.com/blog/how-...term=Read%20on
"..What is a foreign investment fund (FIF)?As stated by the New Zealand Inland Revenue Department (IRD), a foreign investment fund (FIF) is an offshore investment held by a New Zealand-resident taxpayer who holds:
- less than 10% of the shares in a foreign company
- less than 10% of the units in a foreign unit trust
- between 10% and 40% of the shares in a foreign company which is not a CFC
- an interest in a life insurance policy where a FIF is the insurer and the policy is not offered or entered into in New Zealand
- an interest in a foreign superannuation scheme
It does not include interest earned from term deposits, bonds, debentures or money lent. Additionally:
- ETFs do not qualify, only companies that maintains a franking account
- LICs do qualify, as they are considered as stocks.."
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Junior Member
A long time ago Kaspar said:
Originally Posted by Kaspar
Hey mate, the easiest way to invest into low cost index funds like Vanguard and Blackrock (iShares) is through their ETFs listed on the ASX. You can buy shares in these through any NZ broker like ASB Securities or Direct Broking. If the purchase price of your shares in an ETF is greater than 50k then you have to deal with Foreign investment fund (FIF) tax, otherwise you only have to pay tax on the dividends like normal. They only direct credit dividends to Australian bank accounts but will send a cheque to NZ investors.
At the time we went down the SmartShares and SuperLife ETFs route, but recently I've become interested in Vanguard again. The ASX listed Vanguard world shares ETF states the following: "Vanguard MSCI Index International Shares ETF seeks to track the return of the MSCI World ex-Australia (with net dividends reinvested), in Australian dollars Index, before taking into account fees, expenses and tax." Does that mean that we won't get any dividends and therefore wont need to worry about having to do tax for my son? [as a recap we are investing for our young son] We are well under the 50k FIF limit, we're looking to invest more like 5k for him.
Last edited by andrewfreestuff; 29-05-2018 at 04:00 PM.
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Investor
Originally Posted by andrewfreestuff
A long time ago Kaspar said:
At the time we went down the SmartShares and SuperLife ETFs route, but recently I've become interested in Vanguard again. The ASX listed Vanguard world shares ETF states the following: "Vanguard MSCI Index International Shares ETF seeks to track the return of the MSCI World ex-Australia (with net dividends reinvested), in Australian dollars Index, before taking into account fees, expenses and tax." Does that mean that we won't get any dividends and therefore wont need to worry about having to do tax for my son? [as a recap we are investing for our young son] We are well under the 50k FIF limit, we're looking to invest more like 5k for him.
Lots of Superlife/Smartshares's ETFs are directly invested in Vanguard funds.
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Originally Posted by Investor
Lots of Superlife/Smartshares's ETFs are directly invested in Vanguard funds.
But have way higher fees so the best way is to invest directly in the underlying product... (if you do not want to do the monthly dripfeeding of $)
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Junior Member
Originally Posted by blackcap
But have way higher fees so the best way is to invest directly in the underlying product... (if you do not want to do the monthly dripfeeding of $)
You hit the nail there blackcap.
I have never directly invested in ASX shares before, so don't know the in's and out's of how tax is dealt with. My NZX direct investments deal with that all for me. So my question is whether there will be any tax ramifications if I invest in an ETF of ASX which reinvests its dividends. Sorry if this is a a dumb question! - i've just never had to think about this before.
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Investor
I was just responding to the error in his statement.
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Member
Originally Posted by andrewfreestuff
A long time ago Kaspar said:
At the time we went down the SmartShares and SuperLife ETFs route, but recently I've become interested in Vanguard again. The ASX listed Vanguard world shares ETF states the following: "Vanguard MSCI Index International Shares ETF seeks to track the return of the MSCI World ex-Australia (with net dividends reinvested), in Australian dollars Index, before taking into account fees, expenses and tax." Does that mean that we won't get any dividends and therefore wont need to worry about having to do tax for my son? [as a recap we are investing for our young son] We are well under the 50k FIF limit, we're looking to invest more like 5k for him.
If you don't have a problem with the limitations of ethical investment.. there are two vanguard option on investnow:
Vanguard International Shares Select Exclusions Index Fund
Vanguard International Shares Select Exclusions Index Fund - NZD Hedged
"The Vanguard International Shares Select Exclusions Index Fund – NZD Hedged seeks to track the return of the MSCI World ex Australia, ex Tobacco, ex Controversial Weapons, ex Nuclear Weapons (with net dividends reinvested) hedged into New Zealand dollars Index before taking into account fees, expenses and tax."
Fees are 0.2% for the unhedged, and 0.26% for the hedged.
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