1. Are your Investments Costing you?
2. Want to save your home?
3. Property Transactions.
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Are they tax optimised?
Investment returns (real returns) are influenced by a number of factors including:
- Cash return.
- Capital gain.
- Taxation (& often double/triple taxation).
- Fund manager/advisor fees.
- Compliance costs of reporting returns (eg accounting fees).
- Value of your time monitoring investments.
- Inflation rate.
All this is on top of the risk of investment loss – either permanent impairment by financial collapse; or partial impairment via fund or market devaluation.
At McIsaacs, we are becoming increasingly concerned about the number of clients who have poorly structured investments or portfolios that are under-performing for more reasons than merely market factors.
In particular, the imposition of the Portfolio Investment Entities (PIE) regime for many NZ domiciled funds; along with the Foreign Investment Fund (FIF) regime for the majority of overseas funds and investments – these matters have resulted in additional compliance requirements for investors; the fund managers; accountants; Inland Revenue Department. And guess who gets to pay for the majority of these costs? Yes – you!
On the positive side, the PIE and FIF regimes also open many (Ed: unintended?) doors of opportunity for thoughtful consideration to optimising investments – in terms of:
- Structure – which entity type is preferable for which investment or class of investment?
- Portfolio mix – which investments are costing me more in compliance than others?
To assist clients in this regard, we have developed a special Compliance Review of Investments service for our investor clients. This entails a comprehensive analysis and review of the portfolio; an assessment of the costs of compliance; recommendations for restructuring of classes of investments. Whilst the service does not provide investment advice in regards to the investments themselves (we work with your nominated Investment Advisors in that regard), it does provide an overall assessment of the tax effectiveness and compliance costs associated with the differing classes of investments you may have.
In undertaking such reviews, we are finding that clients become better informed as to the real returns being achieved (Ed: or sadly not!) and in a position to effect changes that may improve after-tax returns by significant multipliers of the cost of this service. Any changes typically need to be effected now to gain benefit in the current financial year – so if you have investments and wish to review them – you need to act immediately.
Please contact us to commission such a review.
Are you hearing stories of people being forced to sell their homes to fund the cost of entering a rest home?
With costs of many care facilities exceeding $1500 a week, and with modern medical procedures keeping alive many requiring fulltime care, the erosion of family wealth can be a major issue for many New Zealand families. In some cases, “well” spouses feeling the burden of responsibility, may choose to leave the family home and downgrade property, in order to support their ailing partner. Often, these situations are affecting ordinary Kiwis who have worked hard their entire lives; paid their taxation and contributed positively to society.
Can such outcomes be avoided?
The answer is Yes – but only if you act early.
It is our view that every asset owning New Zealander ought to consider the issues of estate management. Whether it is an 22 year old with a $20,000 motor vehicle and $10,000 in savings (Ed: yes – we know – there is possibly only five Generation Y-ers in NZ with any savings!); a 36 year old guy starting a new business; a 49 year old woman recently separated from her husband; or a 62 year old contemplating retirement – all these people need asset protection for different reasons.
It is imperative that you take action early – as for most risks of loss, the later you have commenced an asset protection regime, the higher the risk that regime is attacked. If you do not have such a plan in place for yourself and your family it is tantamount to having an uninsured home. In our view – something no-one ought do if they value their investment.
Do yourself – or your parents or adult children – a great favour by contacting us to discuss how a well planned asset protection program can provide peace of mind and reduce the risk of loss of wealth. Act today as we simply do not know what lies around the corner.
If you are contemplating any property transaction; any purchase or sale of a business or part of it; any dealing in any major transaction – stop right now!
It is absolutely vital that in addition to talking the appropriate legal advice; that you consider the taxation consequences of the transaction being entered into. Yes – even the purchase or sale of the family home may have some massive taxation consequences you have not even contemplated. So often we have clients visit us well after the event – only to find that they have structured the transaction inappropriately or otherwise done something to cause them loss of some form.
Sometimes the “mistake” may be remedied – but this usually involves far greater cost than would have originally had we been advised prior to the transaction. And often such remedies may expose you to risk that would not have been an issue had you undertaken the correct course to begin with.
A small investment in services at the front end may save tens or even hundreds of thousands of dollars – so please make sure you contact us to arrange a consultation to review such matters before you act. That means before you sign an agreement; before you enter any verbal binding contract; and definitely before you settle a major transaction.
We are here to guide you through what may often be a complicated process and have firms of solicitors we work with if you do not have your own.
We recommend that you contact us before you make plans or sign an agreement for sale or purchase of private property or business assets.