ISAs

[Tia Maria]

This is my first post on this forum, and I'm afraid its a dull financial one - sorry!

Do they have an equivalent to ISA's in New Zealand, allowing your savings to grow tax free?

We have a share isa here and we would like to keep the investment side to save for all those important things later - kids education, pension, swimming pool, large yacht, non stop holidays - you know all the essentials. So I was wandering if there was something equally as tax friendly in New Zealand that we can transfer it to?

[ENZ]

Hi and welcome to the forum. No there isn't anything like an ISA in NZ.

Capital gains are not taxable in NZ. All interest, dividends etc are taxable though.

[Tia Maria]

Thank you for the reply. Good to know capital gains aren't taxable. I suspect we will be seeking financial advice before we leave the UK, but I'm still looking into suitable companies.

If anybody has used someone in the UK they would or would not reccommend, then please let me know.

Cheers

[ShakerMike]

TM

Just so that you know, there is nothing to prevent you keeping the ISA in the UK, but it has to be frozen - if you want to keep it, top it up before you leave. The fund will continue to grow (subject to performance of course) but the downside is that you will more than likely pay NZ tax on the growth.

Given that any interest will be taxable in NZ, the real question is therefore, whether that particular investment is the best to have in terms of performance.

Hope that helps

[Tia Maria]

Our ISA is a Virgin tracker invested in the FTSE All-Share. Is it taxable in New Zealand, because its invested in a foreign stock market, or because its run by a foreign company? Or does neither matter, and they just tax shares in this way?

In other words we've been quite happy with the growth of the FTSE All-share, but maybe it would be better to track it, through a New Zealand company, tax wise?

Wouldn't have attempted such an in depth question usually, but I've just spotted your occupation!

Cheers

[ShakerMike]

TM, the ISA is a UK specific tax efficient investment under domestic legislation. To any authority outside the UK, it's just an investment, ie just a share fund or just a bank account, and no other jurisdiction has the obligation to recognise the tax efficiency.

Think of it as a Quality Street sweet. The UK wraps it up in a shiny wrapper that says "tax free", but New Zealand has no idea what Quality Street are, so it says "Oh it's a sweet"

A daft analogy, but that's how it works in simple terms