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PAA: GST return delayed wind-up

The Inland Revenue is partly to blame for a delay in the wind-up of the PAA.

Tuesday, January 21st 2020, 6:00AM 1 Comment

Members voted to wind-up the association in June, 2018.

Most moved to the new association, Financial Advice New Zealand, which brought together the PAA, IFA and NZFAA. 

It then had to go through a process of having members vote on the establishment of a trust to take over the management of the association's remaining assets, including the money that resulted from the sale of its holiday homes.

A liquidator’s report filed in October of 2018 said that the process to close the association should be finished by April 2019. But it is only going through its final stages now.

Former PAA chief executive Rod Severn said there had been a GST refund due to the PAA, of about $30,000.

But when a return was submitted to obtain that money, Inland Revenue said it wanted to go back through the previous seven years of the association’s returns.

“That slowed everything up.”

He said that process had now finished – or was virtually there.

The $2 million from the sale of the association’s holiday homes has already been transferred to the legacy trust, which aims to make a distribution within the next few months.

It is intended that the money will support work that supports and promotes financial advisers. That could be for individuals or organisations, as a one-off or on an ongoing basis. It has already received applications from people seeking funding.

Former IFA chief executive Fred Dodds said it may be the case that the association needed to dip into its capital in order to fund work in a meaningful way.

Invested conservatively, the $2 million might generate $60,000 a year, he said.

If too many of the former PAA members sought a payout each year, it might struggle to give money in a way that had an impact, he said.

It could take a chunk of money and do some work with Financial Advice New Zealand, he said.

Tags: PAA PAA Holiday Homes Rod Severn

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Comments from our readers

On 21 January 2020 at 9:57 am Mr Slater said:
Just before anyone gets too excited by Fred's comments, the Trustees are not remunerated or reimbursed for expenses. All interest earned will be used as per the requirements under the Trust Deed.

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