New Zealand's tax laws on UK-domiciled funds provide a potential source of business for UK intermedi...
New Zealand's tax laws on UK-domiciled funds provide a potential source of business for UK intermediaries.
Unit trusts, Oeics and investment trusts are effectively tax free to New Zealand residents because gains are classed as capital gains but the tax rate for this is zero on the UK-based products.
Jonathan Fry, joint managing director of Premier Asset Management, said IFAs should be targeting New Zealanders as clients or look to form tie-ups with intermediaries in New Zealand.
He said those intermediaries with a web presence would have an advantage when it came to marketing.
He added a relationship built up with New Zealand clients currently working in the UK could continue for the purpose of fund investments, even when the client returns home.
The tax laws in New Zealand are already being utilised by fund management groups. Several investment trusts, including Foreign & Colonial Investment Trust, have a listing on the Auckland stock exchange.
Edinburgh Fund Managers has just announced a partnership with New Zealand asset managers Armstrong Jones giving it access to the 80,000 investors with the firm.
The Edinburgh Fund Managers announcement is part of an expansion programme for the group strengthening its global distribution channels.
The tie-up with Armstrong Jones, which has NZ$4.2bn under management, is the group's first move into the Southern hemisphere. It has created a new share class in its Oeic for New Zealand investors and the fund range is being actively promoted by director of Edinburgh partnerships, Alan Bathgate.
Paul Fyfe, managing director of Armstrong Jones said the motivation for linking up with Edinburgh was the CGT exemption. He said: "The way was paved for New Zealanders to invest in UK-authorised unit trusts and Oeics just under a year ago, when the New Zealand Securities Commission granted an exemption for their promotion."
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Short-term noise or something sinister?