tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, July 14th, 1:51PM

News

rss
Latest Headlines

IRD signals GST-free fees

Inland Revenue has put out an exposure draft out for consultation in its long-running consideration of fund management fees and GST – and it could lead to higher fees for investors.

Friday, February 10th 2017, 6:00AM

The two Questions We’ve Been Asked (QWBA) documents released on Thursday were expected as long ago as July last year.

The two documents propose that fees paid to the manager of a unit trust are not subject to GST but that administrative services, such as registry, fund accounting and unit pricing by a third party under a contract with the manager, are taxable.

The documents say the fees are exempt because the supply of financial services, and other goods and services that are reasonably incidental and necessary to the supply of those services, are exempt.

That would cover activities including issuing, redeeming, or re-purchasing units, paying to the trustee amounts received for the issue of units, investing the trust property, collecting and distributing amounts in respect of investments or units, and administering the unit trust including maintaining a register of unitholders, and accounting and other records.

“A unit trust may invest in debt securities, equity securities or participatory securities, including units in another unit trust. The manager receives payments from investors for units, pays these amounts to the trustee, and collects and distributes amounts in respect of units or securities (or arranges these activities). These activities are financial services. Therefore, the fees relating to these activities are not subject to GST as they are consideration for an exempt supply.”

At the moment, 10% of unit trust management fees attract GST.

Removing GST from fees would have the biggest effect on boutique fund managers, because if they do not charge GST they cannot offset GST against their costs. There has been speculation this could lead to higher fees to cover expenses.

Some boutique fund managers had hoped the IRD might decide that 100% of their fees should attract GST.

Bigger fund managers would be able to shift their GST-related expenses to other parts of the business.

The IRD started talking to local fund managers about the issue in 2015.

Submissions can be made on the QWBA until March 23.

Fund managers have been approached for comment.

Tags: fees

« Consider pre- and post-retirement adviceLVR restrictions to be reviewed »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • [The Wrap] Dealer group land like a game of Risk
    “Excellent. I've said for a long time that Dealer Groups were a necessary evil. Especially to the new entrant into the...”
    1 day ago by BayBroker
  • Harking back to the old days
    “Tactical move by CIGNA and looks like they have a lot of bench strength now in sales, underwriting and product / pricing...”
    4 days ago by hitting rock
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    4 days ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    4 days ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    4 days ago by Matron
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone ▼3.49 ▼3.49 ▼3.49 ▼3.49
BNZ - Classic - ▼2.55 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 13 July 2020 7:38am

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