Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Gov. to Clarify Tax for Brierley Shareholdes

Government to Clarify Tax Issues for Brierley Shareholders

Finance and Revenue Minister Sir William Birch said today that the tax treatment of Brierley Investments Limited shareholders would be clarified in law.
He said the clarification would be designed to ensure in general that most individual Brierley investors would not be affected by the proposed migration of Brierley.
“Investments into a number of countries can be subject to New Zealand’s international tax rules including the foreign investment fund (FIF) rules. Although the intent of the FIF rules is clear, they do not cater explicitly for companies that migrate.
“The key issue for shareholders affected by the migration is the value at which their shares become subject to these rules. The Government intends to introduce legislation to clarify that, for migrating companies, the shares enter the FIF rules at the market value on the day the company migrates. This reflects the policy as currently set out in the FIF legislation.
“Individuals who hold shares in FIFs that cost less than $20,000 in total are exempt from applying the FIF rules. We will also clarify that, for migrating companies, this cost will be measured with reference to market value at the date of migration.
“The Government understands that, of Brierley’s 107,000 shareholders, 90,000 own fewer than 10,000 shares. Most individuals have small shareholdings that will make them exempt from the FIF rules.
“Their tax consequences will be unchanged. They will continue to be taxed on dividends received. The only difference will be that imputation credits will not be available to them. Any gains that are capital under the current law will continue to be tax-free.
“Those Brierley shareholders who are affected by the migration will be able to elect from four options to account for their income from their shares. This allows them to choose the option best for them. These options are described in the attached annex.
“Inland Revenue has advised the Government that there is no prospect under the current FIF rules of shareholders being able to convert capital losses into tax deductible losses as a result of the migration,” Sir William said.

Ends

Accounting for income from FIFs under present law


 The branch equivalent method requires the income of a foreign entity to be re-cast as if the foreign entity were a branch of a New Zealand company. This requires shareholders to have access to sufficient information to enable relevant calculations to be made, and is likely to involve high compliance costs if it can be used.
 The accounting profits method attributes to a shareholder their proportionate share of the foreign investment fund's consolidated after-tax accounting profits.
 The comparative value method calculates a taxpayer's foreign investment fund income as the amount of any dividends received plus the change in the market value of their investment over the year (adjusted for any capital invested or withdrawn during the year).
 The deemed rate of return method calculates FIF income by imputing a deemed rate of return on the foreign investment fund’s opening book value, or cost if acquired during the year. For the 1998-1999 income year the rate is 9.82 percent. This rate is adjusted annually.

Ends


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Why New Zealand Needs To Change Its Defence Habits


In a flashback to the military displays of days gone by, one of our frigates recently joined a Carrier Strike show of force in the South China Sea, en route to a joint military exercise in Singapore with our traditional allies, called BersamaGold21. Reportedly, Anna Powles, from the Centre of Defence and Security Studies at Massey University felt this to be a case of us doing our bit to uphold international law, and the right of free transit through the region in question... More>>

Government: New COVID-19 Protection Framework Delivers Greater Freedoms For Vaccinated New Zealanders


Vaccinated New Zealanders will regain everyday freedoms when the country moves to a new simplified COVID-19 Protection Framework that doesn’t rely on nationwide lockdowns as the main measure to stop the virus spreading. In a suite of announcements that establish a pathway out of restrictions the Government is also providing up to $940 million per fortnight to support businesses through the challenging period... More>>

ALSO:





 
 


Government: Responds To Independent Review Into WorkSafe

The Government has clear expectations that WorkSafe must action the recommendations of the independent review into the regulator to improve its management of adventure activities following the tragedy at Whakaari White Island, Workplace Relations and Safety Minister Michael Wood says... More>>

Government: New Zealand Secures Historic Free Trade Deal With The United Kingdom
New Zealand and the United Kingdom have agreed in principle the details of a historic Free Trade Agreement (FTA), which will further accelerate our COVID-19 economic recovery say Prime Minister Jacinda Ardern and Minister for Trade and Export Growth Damien O’Connor... More>>

ALSO:

Ombudsman: Launches Investigation Into MIQ Booking System
The Chief Ombudsman Peter Boshier is launching a broad investigation into the Managed Isolation and Quarantine (MIQ) booking system after receiving hundreds of complaints... More>>

ALSO:


Pay Cheque To Pay Cheque: Half A Million New Zealanders Have No Savings
New findings from the Consumer NZ sentiment tracker found that 15% of New Zealanders had no savings, and a further 27% were anxious about their level of savings and would like to have more tucked away... More>>


Government: Mandatory Vaccination For Two Workforces

Large parts of two workforces critical to preventing the spread of COVID-19 will be required to be vaccinated, COVID-19 Response Minister Chris Hipkins said today. “Our education and health and disability workforces have done an incredible job throughout this pandemic to keep themselves and people safe,” Chris Hipkins said.... More>>


Green Party: Deeply Concerned Space Launches May Be Breaching Nuclear-free Laws

The Green Party is deeply concerned that space launches by Rocket Lab may be breaching nuclear-free laws, given our long-standing position as a signatory of the Nuclear Non-Proliferation Treaty... More>>


 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels