1 00:00:00,480 --> 00:00:01,480 Speaker 1: Bryan Bridge. 2 00:00:01,720 --> 00:00:04,040 Speaker 2: There are calls for the government to go further at 3 00:00:04,360 --> 00:00:08,920 Speaker 2: seventeen minutes after six and amending complex tax rules so 4 00:00:08,960 --> 00:00:11,680 Speaker 2: that they benefit every day key we investors as well 5 00:00:11,720 --> 00:00:14,560 Speaker 2: as wealthy foreigners. The government's trying to attract here. We 6 00:00:14,600 --> 00:00:17,000 Speaker 2: spoke about this a couple of weeks back. Jane chip 7 00:00:17,040 --> 00:00:20,919 Speaker 2: Trainee is The Herald's Wellington Business Edit Wellington Business Editor, 8 00:00:20,960 --> 00:00:23,680 Speaker 2: and she's with me tonight. Hi, Janae. Hi, right, good 9 00:00:23,720 --> 00:00:25,919 Speaker 2: to have you back. So give us an idea of 10 00:00:25,960 --> 00:00:28,240 Speaker 2: what we're talking about here. Remind us it's the fifth 11 00:00:28,320 --> 00:00:31,440 Speaker 2: Rules of Foreign Investment Fund rules. Who do they apply 12 00:00:31,520 --> 00:00:32,960 Speaker 2: to currently? What's the deal? 13 00:00:33,880 --> 00:00:38,840 Speaker 1: Right? So currently they these tax rules are basically aimed 14 00:00:38,840 --> 00:00:42,640 Speaker 1: at incentivizing investment in New Zealand assets in the share market. 15 00:00:42,800 --> 00:00:47,680 Speaker 1: So on. It's a good sort of principle. A quirk 16 00:00:47,760 --> 00:00:50,880 Speaker 1: of the rules though, is that for is that they 17 00:00:50,880 --> 00:00:55,800 Speaker 1: treat investments that New Zealanders have offshore slightly differently to 18 00:00:55,880 --> 00:00:59,319 Speaker 1: the way they treat investments that you have locally. Now, 19 00:00:59,360 --> 00:01:02,720 Speaker 1: that's only for investments worth more than fifty thousand dollars. 20 00:01:03,160 --> 00:01:06,160 Speaker 1: So if you have more than fifty thousand dollars in shares, 21 00:01:07,120 --> 00:01:09,959 Speaker 1: invested in the US or you know, other sorts of 22 00:01:10,000 --> 00:01:14,040 Speaker 1: investments you fall under this tax regime, which is different 23 00:01:14,400 --> 00:01:17,240 Speaker 1: to the regime that you'd fall under if you had 24 00:01:17,360 --> 00:01:21,040 Speaker 1: shares invested in the New Zealand Stock Exchange, or if 25 00:01:21,120 --> 00:01:23,360 Speaker 1: you had shares invested through your key We Saber fund. 26 00:01:23,360 --> 00:01:25,840 Speaker 1: That's that's probably that's a pie fund, So that's a 27 00:01:25,840 --> 00:01:32,160 Speaker 1: certain structure. So shares E's, which is an investment platform, 28 00:01:32,400 --> 00:01:35,520 Speaker 1: has raised the point that actually this gets awfully complicated 29 00:01:35,800 --> 00:01:40,120 Speaker 1: for people regular kiwis who it's quite you know, you 30 00:01:40,160 --> 00:01:41,840 Speaker 1: don't have to be super wealthy to have more than 31 00:01:41,880 --> 00:01:46,000 Speaker 1: fifty thousand dollars invested offshore. It gets super complicated at 32 00:01:46,040 --> 00:01:49,960 Speaker 1: tax time because you have to navigate potentially two different 33 00:01:50,040 --> 00:01:53,040 Speaker 1: tax systems. You have to figure out, firstly, do you 34 00:01:53,120 --> 00:01:55,840 Speaker 1: have more than fifty thousand dollars invested offshore in the 35 00:01:55,880 --> 00:01:58,560 Speaker 1: sorts of assets that fall under this regime, and then 36 00:01:58,680 --> 00:02:01,280 Speaker 1: if yes, you have to go through a few more 37 00:02:01,320 --> 00:02:07,320 Speaker 1: hoops and hurdles to satisfy the ID. So this has 38 00:02:07,360 --> 00:02:10,919 Speaker 1: been a long standing problem. The thing is is that 39 00:02:10,919 --> 00:02:15,320 Speaker 1: that fifty thousand dollar threshold hasn't been changed in more 40 00:02:15,360 --> 00:02:18,320 Speaker 1: than twenty five years, so Back in the day when 41 00:02:18,360 --> 00:02:20,680 Speaker 1: it was introduced, fifty thousand dollars was a lot of money. 42 00:02:21,120 --> 00:02:24,200 Speaker 1: It's still a lot, but perhaps not quite as much 43 00:02:24,200 --> 00:02:24,840 Speaker 1: as it used to be. 44 00:02:25,919 --> 00:02:29,160 Speaker 2: Interesting, So, do you think the government's actually gonna pick 45 00:02:29,200 --> 00:02:31,919 Speaker 2: this up and change it because presumably it will cost 46 00:02:32,000 --> 00:02:32,600 Speaker 2: them something. 47 00:02:33,720 --> 00:02:37,520 Speaker 1: Well, yeah, that's the thing. So I took to Revenue 48 00:02:37,520 --> 00:02:41,880 Speaker 1: Minister Simon Watts yesterday and he said he was open 49 00:02:42,040 --> 00:02:47,080 Speaker 1: to changing that fifty thousand dollar threshold. Basically, it would 50 00:02:47,120 --> 00:02:51,799 Speaker 1: just ease the administrative burden on New Zealand investors. It 51 00:02:52,880 --> 00:02:54,440 Speaker 1: would mean that, you know, you don't have to go 52 00:02:54,480 --> 00:02:56,639 Speaker 1: through your investments and figure out well what falls under 53 00:02:56,680 --> 00:03:00,480 Speaker 1: this regime and what falls under that regime, and you know, 54 00:03:00,560 --> 00:03:02,720 Speaker 1: you could set it at a higher level and still 55 00:03:03,000 --> 00:03:08,080 Speaker 1: incentivize domestic investment or investment through pythons. So that's a 56 00:03:08,080 --> 00:03:11,680 Speaker 1: certain type of structure. You can still invest in offshore assets, 57 00:03:11,720 --> 00:03:14,400 Speaker 1: but if you do it through the certain python structure 58 00:03:14,440 --> 00:03:18,359 Speaker 1: then that's fine. Now, the reason this has all come 59 00:03:18,440 --> 00:03:22,680 Speaker 1: up in the news is because Simon Watts earlier this 60 00:03:22,760 --> 00:03:26,239 Speaker 1: month said that he planned to make changes to these rules, 61 00:03:26,520 --> 00:03:31,440 Speaker 1: but only in a way that benefited foreigners and not 62 00:03:31,680 --> 00:03:35,320 Speaker 1: in a way that benefits you and I or regular 63 00:03:35,360 --> 00:03:37,280 Speaker 1: New Zealanders. So I guess the fact that he is 64 00:03:37,320 --> 00:03:39,920 Speaker 1: looking at these rules in the context of attracting wealthy 65 00:03:39,960 --> 00:03:44,000 Speaker 1: New Zealanders to New Zealand means that it is putting 66 00:03:44,040 --> 00:03:47,960 Speaker 1: the issue on the agenda and it is putting it 67 00:03:48,000 --> 00:03:50,560 Speaker 1: on the table. I think it also sort of fits 68 00:03:50,560 --> 00:03:52,720 Speaker 1: into the broader thing that the government's trying to do 69 00:03:52,840 --> 00:03:56,000 Speaker 1: in terms of encouraging people to save and invest for 70 00:03:56,040 --> 00:03:58,760 Speaker 1: their retirements. A lot of young people might get to 71 00:03:58,800 --> 00:04:03,280 Speaker 1: retirement without owning a home, so you know, the investments 72 00:04:03,280 --> 00:04:07,680 Speaker 1: that they have in shares are probably increasingly important for 73 00:04:07,760 --> 00:04:08,880 Speaker 1: their well beings. 74 00:04:09,200 --> 00:04:13,400 Speaker 2: Yeah. You fascinating stuff. Hopefully they the foreigners and the 75 00:04:13,440 --> 00:04:15,760 Speaker 2: exemption there will have opened the door for the rest 76 00:04:15,760 --> 00:04:18,840 Speaker 2: of us. Jane tip Traaney, the Herald Wellington Business editor, 77 00:04:18,880 --> 00:04:22,680 Speaker 2: with this. For more from Heather Duplessy Allen Drive, listen 78 00:04:22,760 --> 00:04:25,800 Speaker 2: live to news Talks. It'd be from four pm weekdays, 79 00:04:25,920 --> 00:04:28,119 Speaker 2: or follow the podcast on iHeartRadio.