jumbo

Does anyone know how funds performance is taxed as held by an individual?

If annual growth (capital growth) is only taxed on sale what about income that is reinvested to make an accumulation unit as in the UK?

Are there any funds designed purely for capital growth to avoid any ongoing tax on income?

Regards

gld

So question needs more detail before advice is given that can be relied upon, e.g. Single Company Peps, Insurance Bonds, Regular Premium Plans, Personal Pensions. Who owns the contract is also of consequence as is the start date, etc., etc.

So answer is depends, however you would in most situations find the majority of situations would result in the following answers.

Q1

Its in the Foreign Investment Fund Legislation

Q2

Taxed as Income Received

Q3

None come to my mind.

Hope this helps -



Geraint

dracupg

Assuming you are permanently resident in Oz and resident in Oz for tax purposes and you are holding onto a UK PEP/ISA, or whatever, if you income is reinvested, you will still get a Tax Voucher which will contain the details of the income and withheld tax (if any) that you need to include on you Oz tax return.

I don’t think many PEP/ISA funds will allow you to keep them going once you tell them you are resident overseas and registered overseas for tax, although I am not sure. I know some people that have elected to keep a UK address available for their UK funds and investments and have just not bothered to declare these on the Oz tax return. I do not in any way condone this.

If you hold in individual shares and use CREST, you need to maintain a UK address for this, otherwise you have the additional expense of using an international custodian in Oz.

I think you are supposed to declare any capital growth on such funds each year on your Oz tax return, rather than on the sale, but maybe someone else would confirm if this is true.

dracupg

Sorry, think I may be talking pants (no change there then ) You don’t get tax vouchers with PEPs/ISAs do you as all income is tax free?????. You would probably have to get the income figure from the annual statement.

bondipom

I needed the cash from my ISA's so I withdrew all of them but I received a letter from the IR stating that I was not allowed to contribute because I was no longer resident in the UK for taxation purposes.

Kiwipaul

If you are resident in Australia for tax purposes you have to declare any income you recieve on these investments to the Australiain tax office through your tax return. Capital gain is not considered until you dispose of the investments and then you have to declare the gain again on your tax return.

Even if you have investments that don't give a dividend they will send you a statement of what the div was ( but which was re invested by the unit trust) that you have to declar to the tax office to be taxed on.

You can DEF hold PEPs when you are resident abroard, but you cannot open any new PEP's unless you are resident in the UK. I held my PEP for a number of years whilst I was in NZ and had no trouble at all when I changed by address to a NZ address.

gld

PEP's are defunct - replaced by ISA's
PEP's should not be assessable in NZ but income emanating would be
PEPS in Oz would be subject to FIF - notated in Oz parliament by Evans 04/89. Watch the FIF regs post 01/01/93

Also could be subject to CGT provisions, etc.

You would have had FIF in Aus but FIF in NZ works different