About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Sunday, August 30th, 8:19AM
rss
Latest Headlines

Tax review raises serious concerns

The McLeod Tax Review if implemented would have some serious impacts on the investment communnity.

Wednesday, July 4th 2001, 11:07PM

The McLeod Tax Review if implemented would have some serious impacts on the investment communnity.

Most of the discussion on the report to date has been about the idea of taxing the equity in homes as a means of encouraging people to invest in other, more productive assets.

However, there are a number of key issues for the savings industry in the report, namely:

  • It prefers the current TTE taxation regime, as opposed to the TET regime favoured by finance minister Michael Cullen (see earlier story).
  • It supports keeping managed funds (with the exception of superannuation funds) under a company structure, rather than the trust structure which the industry has spent many years pushing for
  • It proposes to run a bulldozer over the playing field to put all investments on the same footing.

The argument for TTE over TET is simply that incentives don't work.

This point is even acknowledged by the Investment Savings and Insurance Association. ISI chief executive Vance Arkinstall acknowledges incentives may not necessarily increase the savings rate.

However, they may improve the savings habit.

For many years the managed fund industry has argued for funds to be treated as trusts as they are holding a bunch of pooled investments on behalf of unitholders. The argument goes the responsibility for tax should rest with individual investors.

The McLeod committee didn't buy this argument.

The biggest issue in the report though was how it planned to deal with investments.

Essentially it was against a capital gains tax and wanted to do away the split between capital and revenue, replacing it with the risk-free return model which has been talked about with housing.

It works like this. Instead of having tax on capital gains and income there would be one tax and that would be levied on how much money a person had invested at the start of each year.

The rate of return would be set annually on the amount of capital invested, not the level of dividends or the capital gains.

Good Returns plans to run a series of features on the McLeod report addressing some of the issues raised. The first feature, Tax review put funds on equal footing can be found here.

« RB leaves cash rate unchangedSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Former Mike Pero broker banned
    “Unfortunately Heath did willingly sign a franchise agreement with Mike Pero. He was aware of the terms and conditions when...”
    2 days ago by I was wondering
  • nib plots more growth
    “This is great news, however from my own personal experience nib can't handle the business flows it has at the moment. Their...”
    2 days ago by I was wondering
  • Two advisers investigated
    “Perhaps we're finally going to see a bank adviser and his/her employers facing the music? If it is, it's been a long time...”
    2 days ago by I was wondering
  • Home loan lending takes lower prominence at ASB
    “Hi. Does this mean ASB will focus even more on the growth of there insurance business on taking my clients. Will they continue...”
    2 days ago by Cyril
  • New Zealand lagging on decumulation options
    “I thought it was compulsory in the UK for a person reaching retirement age and receiving a company pension for a good percentage...”
    2 days ago by traveller
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 6.24 5.10 5.25 5.59
ANZ Special - 4.69 4.89 -
ASB Bank 6.50 5.05 5.25 5.35
ASB Bank Special - 4.69 4.89 4.99
BankDirect 6.50 5.05 5.25 5.35
BankDirect Special - 4.69 4.89 4.99
BNZ - Mortgage One 6.65 - - -
BNZ - Rapid Repay 6.24 - - -
BNZ - Special - 4.69 4.69 -
BNZ - Std, FlyBuys 6.24 5.09 5.09 5.19
BNZ - TotalMoney 5.99 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.75 5.75 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
HBS Bank 6.14 5.39 5.39 5.39
HBS Special - 4.69 4.69 4.99
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.45 5.10 5.40 -
Housing NZ Corp 6.49 5.19 5.49 5.59
Lender Flt 1yr 2yr 3yr
HSBC Premier 6.60 4.89 4.89 4.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 4.49 4.49 4.49
ICBC 6.75 5.99 6.39 -
Kiwibank 6.15 4.79 5.49 5.69
Kiwibank - Capped - - - -
Kiwibank - Offset 6.40 - - -
Kiwibank Special - 5.09 4.65 4.99
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.70 5.65 5.95 -
Lender Flt 1yr 2yr 3yr
NZ Home Loans 6.60 5.39 5.49 6.29
Perpetual Trust 7.70 - - -
Resimac 5.59 5.37 5.40 5.52
SBS Bank 6.14 5.39 5.39 5.39
SBS Bank Special - 4.69 4.69 4.99
Sovereign 6.35 5.05 5.25 5.35
Sovereign Special - 4.69 4.89 4.99
The Co-operative Bank 6.20 4.69 4.79 4.99
TSB Bank 6.24 5.10 5.39 5.45
TSB Special - 4.69 4.69 4.99
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.15 4.99 5.19 5.19
Westpac - Capped rates - 6.15 6.15 -
Westpac - Offset 6.15 - - -
Westpac Special - - 4.69 -
Median 6.40 5.09 5.25 5.35

Last updated: 18 August 2015 3:39pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com