tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, November 3rd, 1:12PM

Investments

rss
Latest Headlines

Cullen rubbishes switching claims

Many readers may have seen an article which suggested that the proposed tax changes to managed funds may encourage savers on high marginal tax rates to switch from term deposits to managed funds.

Tuesday, May 9th 2006, 11:33PM
Finance Minister Michael Cullen has described the story as "not only blatant sensationalism, it's wrong."

"To say that people on a 39% tax rate will move bank deposits to the new investment tax rules so as to limit their tax to 33% is uninformed and inaccurate.

"The new rules do limit tax on savings to a maximum of 33%.

But that simply continues existing rules for superannuation and similar savings vehicles. What the new rules do is tax those on a 19.5% tax rate at their correct personal rate, but those on higher incomes will continue to be taxed at 33%.

"So if you earn over $60,000 a year and have a bank term deposit the interest is taxable at 39%. The same person can currently save in a superannuation fund investing in bank securities and the tax is 33%.

"The simple fact is that a bank deposit is different from saving through a superannuation fund and is taxed differently. This has been the case in the past and will be the case under the new rules," Cullen says.

« Finance company sustainability questionedUDC retains investment grade rating »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com