Tuesday 19th of October 2004

The government will shortly consider a report by former BT Investments chief executive Craig Stobo on the tax treatment of collective investments. Stobo is currently putting the final touches on his report, and on Friday Cullen basically said “if you haven’t already put this in your report, add it now.” Cullen told the Institute of Chartered Accountants annual tax conference that removal of the tax appeared to be “an imperative”. Describing the tax as “unfair and inefficient” Cullen told the conference that while he did not want to pre-empt the Stobo report “I would be very sympathetic to changes along these lines.” The shift is a welcome one, says Investment Savings and Insurance Association chief executive Vance Arkinstall. “We’ve been calling for this for a long time now and we would be delighted if that happened,” he says. “At the moment we are treating savers using managed funds products who aren’t necessarily highly sophisticated, financially speaking, differently than the sophisticated investors who have been able for years to arrange their affairs so they don’t pay capital gains taxes.” The ISI – which has managed to put together a unified industry submission to Stobo during the consultation round – pressed strongly for removal of the tax, he says. The tax is also seen as one of the factors pushing New Zealanders more towards property investment.