News
Congratulations Girls!
18.12.15
Three of our lovely Ladies have done well this year!! A fantastic way to end the year
Firstly, our very own Chenae is NMIT’s Top Accounting student this year!
Chenae also received awards in Financial Reporting and Advanced Financial Reporting.
It is always reassuring to know one of Nelson’s ‘smartest cookies’ is looking after your Accounts and Tax Returns!
(Chenae receiving her award from John Inglis and Rebecca Coram, NMIT)
Secondly, the one and only Susan Heydon graduated with a Bachelor of Arts & Media (Visual Arts & Design) after 11 years of part time work! We are very proud of this amazing achievement.
Thirdly, the very talented Miss Caydie graduated with a BCOM in accounting. Caydie also received an award for Accounting Information Systems!
(Caydie with her Tutor, Sue Malthus, NMIT)
Office Closure & Summer Greetings
16.12.15
Our office will be closing on Wednesday 23rd December at 12pm and reopen in the New Year at 8.30am Monday 11th January 2016
Wishing you all an enjoyable summer!
All the best for a fun and profitable 2016!
In life & business not all things go to plan!
Enjoy the journey – don’t sweat the small stuff and always have a good ‘cleaner upper’!
Rembrandt in Nelson
08.10.15
Rembrandt remastered is free to Nelson residents from 12th October to 15th November 2015.
The Art will be spread between the Nelson Provincial Museum and the Suter Art Gallery (on Halifax Street).
Well worth a look!
Please refer to the attached brochure Rembrandt – Nelson Museum
NZ the top destination for start-ups
02.10.15
New Zealand came out top in the new HSBC Expat Explorer survey for setting up a new enterprise.
The survey found New Zealand was the most start-up friendly destination, with 88 per cent of expats giving positive feedback, compared with global average of 56. Singapore was the second-best place to get a new venture off the ground, according to the survey (87 per cent of respondents).
Dubai was also highly attractive to those wanting to make their mark in business, with 86 per cent of expats giving it a favourable report. London was also friendly to entrepreneurs, coming fourth in the global survey, with an 85 per cent positive rating. The English capital, meanwhile, tied with Hong Kong in the business-friendly section of the survey.
Conducted by YouGov for HSBC Expat between March and May 2015, some 22,000 expats in 100 countries were quizzed about their lives, including education and health. Telegraph, September 30 – October 6 2015.
China with Robin
09.07.15
Recently, I went with a small trade trip to Guangdong.
The purpose of the trip was to sell local wine and honey, source glassware for product and find investment partners for capital projects in the region. I have been travelling to the Peoples Republic off and on since 1987, so I have a number of established relationships there.
The population of Guangdong province is 107 Million. It is a short ten and a half hour Dreamliner flight away from Auckland. The airfare cost is a little over $1000 (less expensive than a trip from Nelson to Napier on Air New Zealand!).
Our trip was very productive, and we are planning to go again in November. I have a good understanding of the banking and trade issues involved for small New Zealand businesses wanting to trade there. There are many opportunities as the country slowly opens its door to the world. We are very welcome there.
British expats face shock 55pc tax charge on pension transfers
26.05.15
British expats face shock 55pc tax charge on pension transfers
Moving your pension to Australia or New Zealand could trigger a huge tax charge, thanks to the pension freedoms.
British savers who are moving abroad and transferring their pension to Australia or New Zealand could face a shock tax charge of 55pc thanks to the pension freedoms which applied from April 6.
Under the new rules, which allow savers to take their whole pension pot as cash, pension schemes must prohibit members from accessing their savings before the age of 55, unless the member is retiring early due to ill-health.
Schemes in Australia and some in New Zealand, where thousands of British retirees emigrate each year, do not have this restriction written into their rules.
They allow under-55s to take some of their funds early in some circumstances, such is if they are suffering financial hardship.
HM Revenue and Customs has written to all these schemes, known as qualifying recognised overseas pension schemes (QROPS), and warned them that unless they meet the new requirements they will no longer be able to receive UK transfers without tax penalties.
Schemes must tell HMRC whether they meet the requirements by June 17.
Geraint Davies, of advice firm Montfort International, said overseas schemes are highly unlikely to change their rules to accommodate with the UK requirements because it would disadvantage their local members, who make up the vast majority.
He said Australian and New Zealand scemes are instead looking for an exemption, but the process could take some time.
In the meantime if pensions are transferred to a non-qualifying scheme a UK-applied tax of 55pc on the money in the pension could apply.
Mr Davies said: “In the meantime a lot of these schemes could continue accepting UK transfers even if they don’t meet UK requirements, so it’s essential that anyone thinking of transferring their pension makes absolutely sure that the scheme they are using is compliant. Otherwise they could face a 55pc tax charge.”
James McLeod, of international financial advice firm AES International, said anyone who has transferred their pension since April 6 should contact their scheme trustees or their pension provider and ask for the process to be halted.
“It usually takes three or four months to process transfers to a QROPS, so even if you initiated the transfer in early April there is still plenty of time to stop it until we know whether schemes abroad will comply with HMRC’s rules,” he said. “Savers have a responsibility to transfer their money to a qualifying scheme – the onus is on them to do their homework.
“The good news is that people who transferred their pension before April 6 are unlikely to be affected.”
What is a QROPS?
A qualifying recognised overseas pension scheme is authorised to accept transfers from UK pension schemes. There are currently more than 3,500 QROPS schemes around the world.
They are popular with British expats who move abroad permanently and a large number are based in Australia and New Zealand.
Most pensions can be transferred to a QROPS as long as an annuity has not been purchased or, if it’s a final salary scheme, the pension has not commenced. You cannot transfer British Government or State pensions.
QROPS allow savers to make the most of valuable tax reliefs while working and saving into their pension in the United Kingdom, then if they move abroad for at least five years they pay income tax on their pension at the local rate, which is often lower than in the UK.
Expats must be careful when moving their money however. If they transfer their UK pension savings to an unauthorised scheme they will have to pay up to 55pc tax on the transfer.
Source: Telegraph UK, Nicole Blackmore 11 May 2015
Political Correctness
02.04.15
Political Correctness
There’s an annual contest at Bond University, Australia, calling for the most appropriate definition of a contemporary term.
This year’s chosen term was: “Political Correctness.”
The winning student wrote:
“Political correctness is a doctrine fostered by a a delusional, illogical minority, and promoted by mainstream media, which holds forth the proposition that it is entirely possible to pick up a piece of poo by the clean end.”
In the topsy-turvy world of negative interest rates even gold investment starts to make sense
17.02.15
With mad negative rates, even gold makes sense…
Why would you invest in gold? The yellow metal is a strange asset to be sure – one that is, as has often been noted, laboriously and expensively dug out of the ground in one part of the world only to be laboriously and expensively stored under the ground in another.
It doesn’t give you a say in the running of a company (as equities do) or access to future income (as bonds do); it doesn’t provide you with a roof over your head or rent (as property does) or even liquid consolation if your investment nosedives (as fine wine does).
True, gold is relatively scarce but so are lots of other things. The precious metal is, let’s be honest, valuable because some reptilian part of the human brain is att
racted to shiny things. Gold has no intrinsic value, it’s not particularly useful, and, crucially, it won’t produce any income in the form of interest or dividends.
In fact it’s worse than that. You have to store gold (or seriously upgrade your home security). And that means, capital appreciation aside, it will actually cost you money to invest in it.
But nowadays that last fact doesn’t mark gold investment out as particularly odd.
On Wednesday, Finland issued €1bn-worth of five-year bonds. Nothing so remarkable about that. Except these bonds will pay out an interest rate of -0.017pc: Finland has become the first country in the eurozone to issue five-year debt with a negative yield, meaning that, in effect, investors are paying for the privilege of holding it.
The yields on many other bonds are turning negative in the secondary market. Swiss sovereign 10-year bonds traded at yields as low as -0.322pc on Tuesday. And the phenomenon isn’t confined to sovereign debt either. The yields on a bond issued by Nestle turned negative on Tuesday, one of the first corporate bonds ever to do so. The yields issued by pharmaceutical company Roche are also flirting with the minus sign.
There is now as much as €1.5 trillion of eurozone government debt that matures in more than a year paying negative yields, according to JP Morgan. This is equivalent to nearly a quarter of the total and compares with roughly none last summer.
It’s not just bonds either. Several central banks in the eurozone, as well as Denmark and Switzerland, have not cut their interest rates below zero, charging depositors to hold their cash. JP Morgan says that around €220bn of bank reserves are subject to negative interest rates.
This is all deeply weird and very unusual. Claudio Borio, one of the most senior economists at the Bank for International Settlements – the bank of central banks – has described negative interest rates as “an unprecedented experiment” and expressed worry about the implications if the anomaly persists.
What’s going on?
Worry plays a part. One reason that investors buy safe assets like bonds is that they’re worried about the economic future and therefore the outlook for riskier assets like equities.
Then there is deflation. Prices in the eurozone fell by 0.6pc in the year to the end of January, according to Eurostat. And that skews the picture. Investment returns must be adjusted for inflation. If price growth is even more negative than the yield on your assets, you will still make money in real terms (hard as that concept is to get your head round).
But the root course of this phenomenon is, of course, quantitative easing. Central banks around the world have been buying bonds with a vengeance. This has pushed up prices and, because yields move in the opposite direction to prices, reduced interest rates. Negative yields are, in other words, an indication that we’re in the midst of a rampant bull market in fixed income; many would argue it’s a bubble.
Is it close to popping? Clearly it still makes sense to buy these expensive bonds if you feel there’s room for them to increase further in value. And with the ECB soon to start making €60bn of bond purchases a month, that’s a bet many investors are prepared to make.
But ultimately this all ends in one of two ways. One possibility is that we are in for the long period of deflation and low economic growth that the markets are currently predicting. That’s not a particularly appealing prospect. But the alternative is that these assets are mispriced and, as soon as we get some inflation back in the European economy
, the bubble will burst.
The resulting rout won’t be confined to the bond markets. Government bonds are often used as the “risk-free” base off which other assets are priced. In other words, if bonds are mispriced, then so is everything else.
So, it’s either a long-protracted Japan-style deflationary slump or the mother of all market corrections.
Perhaps investing in gold isn’t such a nutty idea after all.
Ben Wright, Extracted from The Telegraph 04/02/2015
Kiwi Dollar Edges Towards Parity With AUD
13.01.15
Kiwi dollar edges towards parity with AUD
A differing outlook on interest rates has driven the New Zealand dollar to its highest level against the Australian dollar since the latter was floated by Treasurer Paul Keating in December 1983.
The Australian dollar had sunk at $1.046 against the New Zealand dollar in late afternoon trading on Monday, raising the prospect of parity between the two currencies for the first time in 30 years.
Like the Australian dollar the Kiwi has fallen against the American dollar in recent months, dropping from US88¢ six months ago to US77.66¢ by late afternoon trading on Monday.
But at the same time as it has sunk against the greenbank, the New Zeala
nd dollar has made impressive gains against the Aussie.
Westpac chief currency strategist Robert Rennie said the weakness in the cross could be attributed to several drivers.
“One obvious [driver] is the ongoing weakness in iron ore markets,” he said.
“I think everyone would agree that one of the key messages when you look back on 2014 is the fact that iron ore fell further and faster than most, if not all, financial markets’ experts expected.”
A key contributor to this, he said, was weakness in the Chinese economy, particularly in the real estate and construction sectors, where steel is a key component.
Another driver is the strong New Zealand economy. Strong migration numbers “which met and beat expectations by a significant degree”, as well as strong agricultural prices bolstered the New Zealand economy, Mr Rennie said.
“But the key really was the Reserve Bank of New Zealand’s monetary policy stance”, which was “very different from the neutral policy guidance we had from the Reserve Bank of Australia through much of this year.”
In particular, the RBNZ highlighted that further increases in the official cash rate are expected to be required despite significant weakness in dairy prices at the end of the year.
People have also been rethinking their expectations over what the RBA might do in the first half of next year, said Michael Turner, currency 
strategist at the Royal Bank of Canada.
“So it was really an interest-rate driven move whereby the Aussie was suffering from lower interest rates at the front end and the Kiwi was doing the opposite.
“That’s why the Aussie-Kiwi cross has dropped down to historically low levels.”
While the weakness against the New Zealand dollar is a boon for the Australian export industry, the impact would be minimal, Mr Turner said.
“It’s definitely important from the New Zealand perspective but from the Australian exporter perspective, at the aggregate level, it’s probably not something we’d take too much notice of.
“It’s not really something that’s going to be moving the needle.”
Extracted from The Age, Tuesday December 30th 2014. Written by Lisa Visentin
UK Expat Property Owners Should Act Now to Avoid Capital Gains Tax
13.01.15
Expat property owners should act now to avoid CGT
Tax expert Howard Bilton explains recently published rules on capital gains tax that will affect expat property owned from next April onwards.
Under draft legislation published this week, capital gains tax (CGT) will be payable by all overseas persons on gain made from sales of residential property.
Residential property which is rented out will fall within this new CGT regime. This will affect UK expats who hold UK property and were hoping to sell it before returning home. Hitherto they could have taken the gain tax-free. Now they will need to pay CGT. The good news is that any gains are calculated only from the value on April 6 2015.
Principal Private Residence relief (PPR) could still be available. Under PPR, anybody living in the UK who sold their principal private residence would be exempt from paying CGT. UK expats holding UK property might decide to continue holding it until they return to the UK, live in it and then sell claiming exemption from CGT because it is, or was, their main home.
Prior to the new legislation it was considered necessary for the PPR property to be the owner’s principal residence in the world, not just in the UK, so by definition it was not possible for an individual to claim PPR relief unless the owner was UK resident. Now things are changing. To qualify for PPR relief, the owner of a UK property must show that they have spent at least 90 days in the property for each year when they are not UK resident for it to be considered their PPR. The 90 days can be split between husband and wife. So now the PPR property can be their main residence in the UK and does not have to be their main residence in the world.
Of course, all of the above applies to properties held in individual names. Those properties are subject to UK inheritance tax (IHT) at 40 per cent. For this reason, foreign domiciled clients would typically acquire UK properties through companies which would circumvent the 40 per cent charge. However, this planning device is now less attractive with the introduction of the annual tax on enveloped dwellings (ATED) charge imposed on the company each year. Consequently trusts are now increasingly used by foreign domiciles to hold UK property. In many cases a trust will qualify for the exemption from the new CGT charge where PPR can be claimed.
Expats who have been outside the country for five years can sell their property between now and April 6 next year without incurring CGT. After that date CGT will apply unless they live in the property for at least 90 days for each year thereafter. Obviously this will prevent the property from being rented out other than for short periods. Or they wait until they return to the UK, live in the property and then sell which would provide partial PPR relief.
Another option for expats who are foreign domiciled might be to sell the property to a trust now. This would trigger a stamp duty land tax (SDLT) charge but would not cause a CGT problem. The trust would qualify for PPR if a beneficiary met the 90-day test for each year of ownership by the trust. Or the property could be transferred to a Qualifying Non UK Pension Scheme (QNUPS).
A QNUPS is a multi-member pension scheme which should fall outside the general charge to CGT when it is introduced next April. It is also outside the scope of all the ATED charges. And the property should also be outside the scope of UK IHT. It is likely to be particularly useful where property is rented out and PPR will thus not apply.
Howard Bilton is chairman of The Sovereign Group (sovereigngroup.com) and a barrister at law. Extracted from The Telegraph UK, December 24-30 2014
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