Example Take for example, a New Zealand tax resident who: » Acquires shares in USCo with a cost of $40,000 on 1 July 2013 » Acquires shares in UKCo with a cost of $20,000 on February 24, 2007 Q. I am in the position of having invested in a tech stock in Canada in 2002, at a cost of slightly over $60,000, as opposed to today's value of the stock of around $16,000. However, I am uncertain when the law will be passed by Parliament and what are the dates/financial years when these investments would be assessed under the new law. From there you can upgrade to an NZ Expert plan to run your FIF Report, as well as other premium features including: Traders Tax Report – Calculates taxable gains for individuals who hold shares on revenue account (i.e. As noted above, being a New Zealand tax resident, you'll generally pay tax on your worldwide income. Regardless of tax, any investor in overseas shares needs to learn to ride those waves. Perhaps you could answer a few points for your readers e.g. * * * Explanations of changes to legislation including Acts, general and remedial amendments, and Orders in Council. Inland Revenue has already published a summary of the new offshore tax rules on its website, www.ird.govt.nz (under "news and updates"), and it plans to publish a more detailed explanation of the rules on its website shortly. If the rules do apply to you, when calculating your 2007/08 taxes, start with the value of your offshore shares next April 1. Don't let the tax drive your decisions too much. Note that if you have invested less than $50,000, so that you are under the threshold, you will continue to be taxed on dividends - as well as realised gains if you are a trader - as in the past. However, with the new system due to be implemented this year, what does one do? "This compliance cost savings measure is intended to cater for situations where a person may no longer have records of the purchase price of shares acquired many years ago." Inland Revenue has recently published two papers clarifying a lot of the issues people are asking about. I think Frawley is politely trying to tell you the new rules will be easier than the old ones, so what are you moaning about! Her website is www.maryholm.com. Note, though, that the rules don't apply to investments in Australian resident listed companies, or if the total original cost of your non-Australian offshore shares is $50,000 or less. Sorry if this is a dumb question, but I would like an answer. beyond Australia, mean just shares or does it include assets like property, bonds and cash? From what I've read it may be advantageous and legitimate to sell these on or before March 30 and buy them back in April. The rules apply when less than 10% of the shares in a foreign company are held, or units of less than 10% in an overseas unit trust. Individuals will pay tax, at their personal tax rate, on the lower of: But it might be pretty hard to argue that you had any other purpose. In contrast, a non-resident is taxable only on New Zealand-sourced income. The law has already been passed, and will apply from April 1, 2007 for people whose tax year runs from April 1 to March 31, which is most individuals. Q. # Include the dividend as usual and not enter it in the value of the shares, or They also jointly own shares costing $30,000. It also covers managed funds held overseas and … 2) Is the $50,000 exemption or threshold based on the total cost of the shares including brokerage, or is it just the cost of the shares? at no cost to us. If this is you, Sharesies can’t handle your tax for you and you should seek tax advice. # If tax due is accrued is it still to be wiped upon death? But the man's total, $5000 plus $15,000, keeps him under the threshold. For example: A woman owns shares costing $40,000 and her husband owns shares costing $5000. listed on the Australian Securities Exchange (ASX), qualify for the exemption from the FIF rules on its website, a FIF superannuation interest (from 1 April 2014). "If the investor is an individual or family trust and the total return (dividends and capital gains) on their portfolio of directly held shares is less than 5 per cent, then tax is paid on the lower amount." "On-line calculators will be available on Inland Revenue's website which will calculate the tax answers for investors from the data they input," says Frawley. It's irrelevant what happens to their value after purchase. This is then converted to a certain number of shares, which are added to the base shareholding. Wages and salaries are usually paid directly into a bank account. A. Overseas pension income (see our separate guidance on this); Other overseas investment income, for example, dividends on shares in overseas companies. 4) In light of what we've said above, let's change this to "Would you recommend that a person sell down to $49,999." "The new rules have been designed to minimise investors' compliance costs," he says. We worked in Ireland for a number of years and received some shares as part of employee incentive schemes etc, ie. That would save you some tax and some hassle. My holdings will probably then be well over $50,000 (I've had them a long time). A. # The Aussie exemption doesn't include companies that are not resident in Australia, even if they are listed on the Australian stock exchange. Under the new fair dividend rate method no tax would be payable in such an income year." But how are dividends on shares purchased during the year treated? will be your status as a New Zealand tax resident. Investments in overseas companies and managed funds costing less than NZ$50,000 and Australian shares not included in the FIF regime will usually be treated under the normal income tax rules, when on the basis the shares were not acquired with an intention of disposal, shareholders only pay tax on dividend income they receive. The $50,000 threshold. But if you bought your shares before the early 1990s, using this shortcut will probably give you considerably higher share costs than were in fact the case - although as long as the total is still under $50,000, that doesn't matter. This means a New Zealand resident receiving an inheritance from an overseas estate is treated as receiving a distribution from a foreign trust. less than 10% of the units in a foreign unit trust. The New Zealand stock exchange is the NZX and the Australian stock exchange is the ASX. The RBNZ also holds monthly NZ dollar/US dollar data going back to 1970, used in the calculation of the trade-weighted index. 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