Summary of Investment Tax Changes

Changes to the tax laws in New Zealand in 2008 have made a big difference to the tax on certain investments. These changes were made to encourage New Zealanders to save both by lowering the average rate of taxation and 'levelling the playing field' for differences that previously existed between investments.

Some of the most notable changes are:

  • As of 1 April 2009, the NZ government began the next phase of reductions to personal tax rates and thresholds which will continue over the next 3 years. These will apply to all individuals including:

  • employees who make PAYE payments directly to Inland Revenue (IR 56 customers), and
  • individuals who file IR3 tax returns. Current PAYE rates and thresholds:

Income thresholds Former Rates: Income thresholds Current (as of 1 April 2009)
Income to $14,000
12.5%
Income to $14,000
12.5%
$14,001 - $40,000
21%
$14,001 - $48,000
21%
$40,001 - $70,000
33%
$48,001 - $70,000
33%
$70,001 and over
39%
$70,001 and over
38%

Note that these exclude ACC levies.

  • The Independent Earner Tax Credit (IETC) was introduced which is a tax credit for New Zealand tax residents whose annual income is between $24,000 and $48,000.
  • To view the full requirements for the IETC as well as access more information on the additional tax rate changes across KiwiSaver, Supannuation, investments, etc, you can go to the IRD page by clicking here

  •  “Under the new rules, all international shares in PIE funds (pooled investments) are now taxed based on the Fair Dividend Rate of 5% irrespective of how they are held or where they are located and irrespective of how the fund performs.”

     

To find out about how these current tax changes could benefit you and how to access them, contact a local Spicers adviser today by clicking here to find one in your area.

You could also give us a call tollfree on 0800 777 802. We will be happy to answer any questions you may have.

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