Hunter: KiwiSaver funds in global shares liable for tax slippage

Tony Hildyard

For many investors, having a stake in the global market is one of the key ways to achieve a diversified portfolio. But a recent report by Hunter Investment Management has shown that investing in global markets through offshore unit trusts could result in some unhealthy tax slippage for your funds.

The report showed that if a New Zealand taxpayer, including KiwiSaver funds, invests in global shares via an offshore fund like an Australian unit trust, then there are three potential sources of tax slippage.

1.  Non-resident withholding tax on the dividends paid by the underlying companies.

        2. Tax deductibility of the fees within an offshore fund.