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Dunne Reviews NZ's 'Realistic' Budget

Wednesday, June 16, 2010

During his post-budget address, Peter Dunne, New Zealand’s Revenue Minister, said the tax changes made in last month’s budget were aimed at boosting savings and investment, ensuring international competitiveness in tax rates, and keeping the tax system as simple as possible, by removing distortions within it.

One of New Zealand’s difficulties, he said, is that nearly one in five - just over 17% - of New Zealanders with skills both live and work overseas. Enticing those citizens to return and also retaining a skills base in the country are two of the government’s problems. The reduction in the top personal tax rate to 33% and in the company tax rate to 28%, are expected to help in that respect.

He also hoped that the fall in the top personal tax rate, to the same rate as the trust rate, should also mean that “there will be no longer any reason for the dramatic explosion in the number of trusts being set up by people to shelter income to minimise their tax liability.”

He confirmed that, when the goods and services tax (GST) rate rises to 15% in October, those on main benefits and fixed incomes, including pensioners, will be fully compensated immediately for that increase, with further cost of living adjustments due in April 2011.

He also recounted that there have been significant changes to the tax arrangements relating to investment property, most notably with respect to the removal of depreciation and the proposals to treat loss attributing qualifying companies on the same basis as limited partnerships.

“It is worth noting,” he said, “that the removal of the tax distortions affecting the investment property market, where an overall NZD200bn (USD139bn) investment shows annual losses of up to NZD500m costing about NZD150m a year, has been achieved without resorting to draconian measures like a land tax, a capital gains tax, or a risk free rate of return method.”

The government is, however, increasing the resources available to the Inland Revenue Department to carry out more tax audits - nearly NZD120m over the next four years. Peter Dunne is expecting the latest moves to boost revenue by nearly NZD750m over that period.

He said that the government is “cracking down on the great Kiwi pastime of finding loopholes in the system to exploit for tax and benefit purposes, most notably the 9,300 families identified by the Tax Working Group as using investment property losses to reduce their taxable income so they could qualify for Working for Families tax credits.”

He signalled more work is to be done in that area to close other loopholes.”For many New Zealanders,” he added, “such ‘gaming’ of the system simply offends their basic sense of fairness.”

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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