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Tax changes are great news for investors

For Immediate Release
April 11 2006
Tax changes are great news for investors – better news for New Zealand’s capital markets

Michael Cullen today announced sweeping changes to the taxation of managed funds in New Zealand. “The removal of what has been, in effect, a capital gains tax on managed funds marks the beginning of a new chapter for investors and for New Zealand’s capital markets” said Carmel Fisher, Managing Director of Fisher Funds Management in response to the announced reforms.

One of the key initiatives in Dr Cullen’s package is a change to the taxation of capital gains on New Zealand and Australian shares owned by investment vehicles such as managed funds. Previously managed funds have had to pay tax on any capital gains earned – under the proposed changes these gains will become tax free. “This means better long term returns for investors in managed funds” said Fisher. “For example an investment of $10,000 in our New Zealand Growth Fund in August 1998 would have been worth $61,745 today under the proposed regime - $26,939 more than under the current tax framework. This is a real win for investors.”

“Not only is the abolition of taxation on gains good news for New Zealand investors but we believe it will assist the development of New Zealand’s capital markets.” Before today’s changes other assets such as residential property have had a tax advantage with capital gains being tax free. This has resulted in a significant portion of New Zealand’s savings being tied up in relatively unproductive assets. Today’s announcement levels the investment playing field. “It is a much commented on, but valid theme, that New Zealanders have typically invested too much of their wealth in residential property” said Fisher. “Dr Cullen’s changes should see a rebalance of investors’ portfolios towards shares.” Fisher sees this change not only benefiting investors in the long term through better returns and a more robust portfolio but that it will “stimulate productive investment in New Zealand companies and ultimately deepen our capital markets. It is my view that a pool of local savings is the lifeblood of a growing economy.”


About Fisher Funds (

Fisher Funds is a New Zealand based investment company that specialises in investing in the New Zealand and Australian share markets. Fisher Funds manages more than $450 million for over 8000 New Zealand investors. The Fisher Funds New Zealand Growth Fund has been the best performing New Zealand share fund over the seven years ending 31 March 2006 as measured by Fundsource. In March this year Fisher Funds was recognised as Morningstar Fund Manager of the Year 2005 Domestic Equities – New Zealand award for the second year running.


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